Pension: The emergency steps you can take to rescue your retirement

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Pension saving is an endeavour which is often undertaken by large numbers of working Britons planning for their retirement. While the State Pension is available to most people who have contributed decades of National Insurance credits, personal savings can provide a welcome boost. Indeed, many people choose to undertake private pension saving in addition to their automatically enrolled workplace arrangement, which also provides funds.

However, there is one group which does not benefit from auto-enrolment, and they could be losing out as a result.

Self-employed people often do not have the benefit of a workplace arrangement, and therefore, a private pension is often key to boosting retirement income.

But a lack of savings is often confronted by this group, who are, on average, less likely to put aside money for their retirement. 

With running a business often a priority, many have unfortunately put pension savings on the back burner.

However, this could prove disastrous for prospects after work comes to an end. 

Failing to save could mean retirement is not possible for those who are self-employed. 

Thankfully, though, there are certain ways for people to rescue their retirement at a later stage. spoke to Robert Cochran, Senior Corporate Pension Specialist at Scottish Widows who shed more light on the matter.

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He said: “There are currently more than a third of self-employed workers who are not saving at all towards their retirement.

“It is never too late to start saving into a pension, and now is as good a time as any because as soon as you start contributions into a pension plan you begin to reap the tax advantages they offer.

“For those who are approaching retirement and haven’t previously used their annual allowance, they may find themselves with considerable profits from their business.

“They may be able to carry forward their previous three years’ allowance, which could increase their allowance from £40,000 to as much as £160,000.”

However, Mr Cochran also highlighted the issues with a lack of engagement in pension saving.

He added: “Many people don’t think about how they will afford to pay for the lifestyle they want in retirement until they get closer towards it.

“To help solve this problem, greater engagement is needed, and at a younger age.”

Mr Cochran supports the idea of policy reform for pensions for the self-employed, and action taken to level the playing field in the sector. 

Automatic enrolment and the introduction of new minimum and default contribution levels, he states, are also key to helping larger groups of people save towards retirement. 

The Money Advice Service states people should start considering saving for a pension as soon as possible.

However, actively thinking about retirement should be undertaken 10 years before a person plans to leave the workforce.

At this point, people should be considering their retirement income options and reviewing their pension investments.

For those who have not yet started a pension journey, it is not too late to start, and people can still add the equivalent o their annual salary into their pension fund each year, tax free. 

Those who are concerned they will not have enough money for retirement are encouraged to speak to an independent financial adviser to gain more clarity.

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