News Article

New pension rules: saving for the future

Published 1 October 2012 by

The importance of putting some money aside for the future shouldn't be underestimated - and today, new legislation has come into force that will see over 5 million people putting money (for the first time) into a pension pot by the end of 2018.

NEST, the national not-for-profit pension scheme launched under the rules, has worked out that most of these new savers will need to set aside just over £2 a week to get started. And savers whose employer pays all of the minimum contribution required by law won't even need to do this.

11 million UK workers who currently don't have a workplace pension will be automatically enrolled on the scheme. 46% of these people have never put money aside in any kind of pension before.

Under the new scheme, savers who put aside just £2 per week will get almost £3 from their employer and nearly 60p from tax relief to go into their retirement pot. This works out at just under £6 a week - or £25.74 a month.

Over time, this savings pot could grow substantially - and NEST has highlighted that setting money aside for retirement is something that can start with small, affordable steps.

A spokesperson for thinkmoney commented: "Planning ahead for the future makes good financial sense and there are various budgeting tools that could help you do this. The thinkmoney Personal Account, for example, is an alternative to a bank account that comes with a built-in budgeting service. Our customers have their income divided into two separate accounts every month, so they can be confident that they won't mix up their spare cash with the money they need for their bills and other monthly costs.

"In other words, you won't have to worry about overspending the money you need, which could go a long way to helping you stick to your budget and save for the future."

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