Millennials are not paying enough money into their pensions. Even though more millennials are actually contributing to their retirement funds, the overall total amount has actually dropped. This is a concerning trend, especially when looking at the pension habits and requirements of other age groups. With Generation Z almost doubling their overall pension wealth, the question of why millennials are not prioritising pension payments is being asked. It’s clear that there is a need for more priority when it comes to teaching people about the benefits of a strong pension, as failing to address these issues now could lead to some very negative outcomes in the future.
Pension Essentials
The pension experts Portafina have compiled a variety of valuable resources about how pensions work and how they can benefit you in both the long and short-term. Pensions have been designed so that when it comes to retirement time, you have a comfortable amount saved that will allow you to live the lifestyle you’ve always dreamed of. Whether that’s travelling the world or moving somewhere new, how you spend your pension is up to you. The problem is that even the over-55s are keen to have more information about pension basics. When 53% of millennials are confused over how pensions work, and what they can do for you, there’s very clearly a need for more access to pension info.
Tax Relief
It’s a good idea to look at your pension payments as a form of cash-back. When you make a contribution into your pension fund, the government will then refund your income tax amounts. This can lead to some big savings, although there are limits that you will need to be aware of. It’s also worth knowing that any money that you do contribute into your pension will not be taxed. This makes it a very valuable saving tool, especially when combined with other tax breaks as well.
Workplace Pensions
Employers are obligated to give you a workplace pension. While these have been set at a total of 5%, in April this year there are set to be some changes. From April, you will be required to pay 5% of your wages into a workplace pension, while your employer will have to contribute 3%. This leads to an increased total of an extra 3% on previous requirements, giving you more to retire on when it comes to finally leaving employment. This can help with the snowball effect that comes with regular pension contributions.
It’s clear that the advice offered by Portafina Discovery is more important than ever. High property prices, as well as the financial demands of long-term renting, have meant that millennials are less concerned about the future than they are about surviving the present. The key is saving little and often. This will make it much more likely that when it does come to the time to leave work, your pension is the foundation of a more comfortable retirement.
If you’d like to learn more about pensions and how you can get more from them, follow Portafina on their social media channels. These can be found on Facebook, Twitter @Portafina_UK, Youtube, and LinkedIn.
