July 5, 2022

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‘Baffled!’ Martin Lewis explains two key pension sorts and the way they affect your retirement

“Now, the one factor I might warn on that, if you happen to’ve obtained a remaining wage, and for instance you had been to go to half time hours within the final yr, simply be barely cautious and at all times ask your scheme: ‘Will that drop what my remaining wage could be as a result of I’ve diminished my remaining wage voluntarily?'”

Mr Lewis went on to clarify outlined contribution pensions in additional element.

He stated: “The opposite sort of pension, which is the one that the majority firms supply, the one which auto enrolment works on, and likewise all personal pensions fall into this class is outlined contribution or cash buy.

“That is the place the quantity that goes in is outlined, and you’ve got a pot of money, after which you possibly can select what you do with that pot of money in retirement.

“It is kind of conceptually less complicated to grasp. You have obtained 10, 20, 50, £100,000 in your pension pot, and you need to watch out the way you get it out due to the way in which that the tax comes.”

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