“When a man retires, his wife gets twice the husband but only half the income.”

Pensions are often considered the best way to save for later life, with massive benefits including generous tax relief and tax-free growth over a long-term period. 

However, they aren’t the only way to save for retirement with several other options available to ensure you’ll be able to enjoy your later years as much as possible. A (Lifetime ISA) LISA is one of these options.  
You can open a LISA anytime between the ages of 18-39 and save up to £4,000 a year. There’s no tax included on any interest and whatever you pay before the age of 50, the government top up by up to 25%, subject to a maximum of £1,000 per year.  

One main drawback about a LISA is the lack of access, however if saving for a rainy day, it’s hopefully an account you won’t need constant access to.  Charges arise if you try to withdraw at any time apart from to use as a deposit for your first home, or after the age of 60.   You’ll pay a 25% charge if you withdraw money or transfer the Lifetime ISA to another type of ISA before 60. However, money withdrawn is always tax free, unlike that from a pension, however, is not advisable as a substitute for a pension. 

Most workers are also eligible for a state pension. The state pension is paid by the UK Government and if you qualify, you’ll receive £164.35 a week from your state pension age.  The current age is 65, however for those born after 5 April 1960, it is rising to 66, and those born after 5 March 1961, to 67.   On its own, at a mere income of £8,546 a year it’s clearly not quite enough to live on, however can be vital to help sustain a retirement income from any private pension you may have.

Lastly is a Workplace pension. Most businesses now are set up to an autoenrollment scheme, meaning that at least 5% of your pre-tax earnings goes straight into your pension pot.  This is calculated from total wages, including any bonuses, overtime or other additional pay you may have received. You’ll make contributions based on your total earning between £6,136 and £50,000 a year before tax.  You are eligible for a workplace pension if you are:

• Over 22
• Below state pension age
• Earning more than £10,000 a year
• Ordinarily employed in the UK.

Most people don’t realise that they could actually get a lot more out of their workplace pension than they do.  Simple moves like changing how your money is invested could give your savings a massive boost. To do this, it would be worth exploring how your pension is invested and finding the best pension fund available for you.  It’s quite simple to switch your pension scheme, however it is worth discussing with a financial adviser.