Think you're too early to worry about your pension? Think again, as the government plans simplify the State Pension in Britain so young women are better equipped to plan for retirement.
Retirement may seem a long way off but new government proposals suggest women need to start thinking about pension plans in their 20s as they will be working longer and income will be less secure than their parents generation.
The government plans to simplify the State Pension in Britain by introducing a single-tier system where everyone with 30 years of National Insurance contributions will receive a basic flat-rate pension of about £140 a week.
If the changes come into play, the reformed system would see women and the self-employed as the main breadwinners, enabling stay-at-home mums to build their own State Pension instead of having to rely on their husbands.
Although the changes would take a number of years to be institutionalised, the proposals highlight the importance of preparing our retirement pot as early as possible to prevent worry later in life.
‘The younger you start to save, the bigger your pension pot will be,’ says a spokesperson for the Department for Work and Pensions. ‘£1 invested in your 20s could be worth 40 per cent more than one put aside in your 40s.’
So how do you kick start the saving process? Most importantly, says the Department for Work and Pensions, ‘find out if your employer offers a workplace pension and join it. You could gain an extra £650 a year – or £30,000 over your working life – by joining your employer’s pensions scheme.’
To find out what the best saving options are for you, visit www.mymoneyoutlook.co.uk or call 0300 500 5000