Pension
A pension is an income in retirement. It may not have occured to you but your retirement planning probably started as soon as you reached 16. To qualify for the full basic state retirement pension, you need to have made sufficient national insurance contributions throughout your working life.
For many people, the basic state pension is not going to be sufficient to live on in retirement. Since April 2002, the basic state pension for a single person has been £75.50 a week, or £45.20 for a wife (based on her husband's NI contributions record) and £120.70 for a married couple (based on husband's contribution) and £151 for a married couple where both have paid full contributions.
The basic state pension is only the beginning of pension planning sums for many people. It may be supplemented by: (i)an additional pension from the state, SERPS or the State Second Pensions SP2(ii)a company or occupational pension scheme.(iii)a personal pension plan ( PPP )(iv) retirement annuity contract a (v) AVCs (vi)a stakeholder pension(vii) unapproved pension schemes(viii)other sources of income.(ix)the minimum income guarentee (MIG) of £92.15 a week for 2002-03.
Assuming your pension is going to come, at least in part from sources other than the state, you are likely to have more than a passing interest in the investment performance of the fund managers managing the fund which will one day provide the income you'll need in retirement.
Pension planning is tax-favoured but it is a complex area. given that we are all living longer, we can expect to face more years in retirement. And as the pension sales agents might well point out, 'retirement should be a holiday without the need to have to scrimp and save'.