How do pensions work?

The first thing to remember is that if you work and pay national insurance, you will be entitled to a basic state pension.

However, a basic state pension is often not enough to provide you with the standard of living you want.

The statistics for 09/10 indicate that if you are a single person, you can expect to receive £ 95.25 per week, which equates to £ 4572 per year. A couple receives £ 152.30 a week or £ 7,310.04 a year - is that enough?

While a basic state pension provides you with a solid foundation, it is also worth considering another source of income when you have finished working.

There are other types of pension that you can have in addition to your basic state pension, and given that the government is not overly generous, it is definitely something to consider.

Your employer may offer a pension plan, or if this is not an option, you can start your own.

A pension is a long-term investment that you pay for until the time you retire. If you have a company pension, your employer will also contribute and help you create a bigger pot for your pension.

The money you pay into your pension is not taxed, but instead is placed in stocks, shares and other investments that allow the pot to grow Berufsunfähigkeitsversicherung. 

When you decide to retire, your pension fund is converted into an income that you receive until the day you die.

It is worth knowing that you do not have to stop working to start receiving from your stakeholder or personal pension. In some cases, you may even continue to work for your employer while you retire.

What is important to consider is that you can be retired for as long as 30 years. With this in mind, make sure you are supported as your pension becomes your income.

The longer you have a scheme for, the better off you are, although you can not take money from your pension until you are 55. Knowing the basics will help you save for a better future.