Demi-pension

It's a bit of a hobby-horse of mine, pensions. There are a couple of things about them I'd like to reiterate:

1. They almost certainly offer the best return on savings available in the UK, as the government actually invests your a rebate into the plan; if you're a basic-rate taxpayer, for example, the Treasury pays in 22p for every 78p you contribute.


2. The earlier you start to contribute, the more you'll save. Even if you start piling in loads of cash in your thirties, you'll never make up what you would have made if you'd started contributing a tiny sum in your twenties.

This applies to private pensions, of course, be they stakeholder or otherwise. But this is what you have to rely on now as successive governments have ducked the bullet on state pension contributions. Moreover, if you look back to 1950, there were roughly five workers for every pensioner. But by the time I hope to retire, around 2030, the ratio of workers to pensioners will have halved. That means half the money to help me out in my old age; and when the full state pension is currently around £70 a week just think how far it'll go by the time you retire.
I could point you in loads of different directions for information about pensions and why you need to save more. For the moment, however, I'm going to stick to this article in the excellent Motley Fool, which sets out all the changes that are taking place to pensions from the new financial year.
You should take advantage of some these changes as you can, even though they may seem unpalatable. If not, just spend 2 minutes on this form to see how poor you might end up.