Planning For Retirement

A personal pension is a type of savings plan to help you save money for retirement ✨✨✨

For self-employed workers with a variable income, it’s important to start saving into a pension as soon as possible.

Even if it’s not by much, workers can always increase their contributions when they are more financially secure.


Whilst retirement may seem far off from now, Aviva calculated the following pension funds according to the age an individual began saving until the age of 68:

Age Gross Earning Earnings Saved Per Month + Tax Relief Contribution Pension
25 £18,000 5% (£60) + £15 £75 £74,000
35 £18,000 5% (£60) + £15 £75 £48,000
50 £18,000 5% (£60) + £15 £75 £19,000

As you can see, with all things being equal with earnings and contributions, starting later will mean having a smaller fund.

What’s more, by deciding against having a pension, you could miss out on tax breaks in these long-term savings accounts.

This is because the government pays a bonus to those saving into a pension, which you cannot get from saving into an ISA.

You get a tax relief on what you pay into a pension at the same rate of income tax you pay - 20%, 40% or 45%. For example, if a basic rate taxpayer pays £80 into a pension fund, they would get an extra £20 from the government added to their pension.


It’s worth knowing that you can take a quarter out of the pot tax-free from the age of 55, with the rest subject to tax.

If you work flexible hours it can be hard to budget when your income changes monthly, so it’s important to understand how a pension affects your current income.

Despite losing disposable income now, you should see this as larger sum to live on in the future.

Portify helps you budget for this and reach your financial goals by planning for your future wellbeing ✨

It’s predicted transactions feature shows you where your monthly expenses are coming from, like bills and other recurring costs.

So, you can decide how much you can afford to put into a pension pot and set a monthly earning goal to help achieve this.