Should I opt out of my pension and use the money to cover the growing cost of living? | UK News
Personal finance expert Gemma Godfrey has answers to your questions about cost of living and money-saving dilemmas: Could your pension contribution be better used for those who need it? work like paying bills?
Mark A: Hi, I’m 37 years old and started getting my pension late. I had about £35,000 in there. With the current world, this has now dropped to £24,000. What the hell am I supposed to do? Given the cost of living, the extra money is helpful, rather than going in a disappearing pot.
Gemma says: This is a conundrum because for some people, paying a pension is no longer an option as they are struggling to cover the current basic costs of living.
However, your question implies that you can keep paying, you’re just wondering if you should.
The most important thing to say is that when making any financial decision, it is important to speak with a financial professional who can review your particular situation and offer personalized advice. .
The following is not a personal recommendation.
Personal finance expert Gemma Godfrey
First of all, pensions offer some serious financial benefits, such as being able to contribute at a compound salary (not taxed), employers being able to add their own contributions and money. pensions can eventually be tax-free as well. .
Second, pensions offer an opportunity to beat inflation because it can be invested in shares of companies that can profit from rising prices.
Investments depreciate as much as they appreciate, and that’s why having a long time horizon is so important to being able to try and weather the storms.
In general, we are living longer and the cost of care in later life is increasingly expensive, with only a pension to fund once we have stopped working.
Also, while we tend to see a pension as something we don’t need until later in life, the early years are the most important for funding it.
For the average earner in his thirties, missing out even a few years in contributions could cost them tens of thousands of pounds in retirement.
Gemma is a business consultant, financier and TV presenter, an ambassador for the charity Surviving Economic Abuse, and a former boardroom advisor to Arnold Schwarzenegger on The Apprentice.
