Three Compelling Reasons Why You Need a Pension In The UK

Retirement is something that most of us would rather put off and worry about later in life, especially when we're young or just starting in our careers. We'll discuss some interesting reasons why you need a pension and why it is essential to begin preparing as early as possible.

Life Expectancy

The first reason you need to plan for retirement is the simple fact that people are living longer today, on average, than ever before. Although it has slowed in the last decade, life expectancy has steadily increased in the UK over the previous 40 years.

From 2018 to 2020, life expectancy was 79.0 years for men and 82.9 years for women. Living longer means we need more retirement funds to keep us going. And if you are fortunate enough to live beyond the average bracket, you'll need to stretch your retirement savings even further than expected. That means saving more and planning for the longer term. The earlier you contribute to your pension, the more likely you will have enough retirement funds to last a lifetime.

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Gain Financial Security

It's realistic to expect that you may face financial difficulties in the future. Younger people are often optimistic about their economic future, living with the belief that things will get better in the coming years, but this is not something you can be 100% sure of.

Unfortunately, your future is never guaranteed, which is why retirement planning is necessary. Start by taking the simple step of checking out the best pension providers in the UK, and take out a retirement savings plan as soon as possible. Different pension providers will offer different services, so finding one that suits your needs is important. You may even consider a Self-Investment Pension Plan (SIPP), which lets you use your savings to invest in stocks and other financial instruments. There is usually freedom to transfer your pension to another provider too.

Source: Pixabay

Can't Work Forever

Especially when you are young, you might have the desire to never retire. And although you may be passionate about doing what you love for as long as possible, unfortunately, this is frankly not possible for most. The average retirement age in the United Kingdom is 65 years and for a good reason. The fact is, you can't work at a high level in your profession all your life. We all get older and slow down, and some tasks will become more difficult and complicated.

No matter how much you want to continue working all your life, that's no excuse for not saving for retirement. Having that money on hand prepares you in case you retire earlier than you expected. Without a sufficient retirement fund to fall back on, you'll be stuck and left with regrets. On the other hand, for others, the dream is to work as hard as possible and retire as early as possible to enjoy all your hard work and savings.

Rest assured, it is never too early or too late to save and do pension planning. Keep in mind, though, that the later you leave it, the more considerable percentage of your income you will need to contribute each month in order to fund a sufficient pension, so don't procrastinate.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes