How Much Should You Be Paying Into Your Pension?
My friends, I’m so sorry for another pension related blog post, but I honestly think this is important and I’m on a bit of a mission to get you all to hop on the pension train with me!! So bare with me and I hope it all makes sense! Also if you ever want to DM me as it can be hard to know where to start, please feel free! I’m not a financial advisor, but I do have some friend advice if you want it! But basically, start a pension, pay in what you can afford and the sooner you start the better! OK! Let’s go, let’s chat blogger pension stuff!
How Much Do I Pay Into My Pension?
In the interest of full transparency, I thought I should tell you how much I pay into my own pension, just so you know and can use it as a bit of a guide and also know that I am taking this seriously. Also, if I want to increase or decrease my contributions at any point, I can, so these figures aren’t set in stone and yours wont be either.
About a year ago, I was paying £150 per month into my pension, which turned into £180 per month because the government give you an extra 20% on top of our contributions as tax relief. However, even with the investments the pension company was making, I felt like my pension wasn’t growing as quickly as I wanted. So I decided to ramp up my contributions to £300 a month, which I was really pleased with as that turned into £360 a month with tax relief and my pension started to grow quicker. I felt SO encouraged I decided to up it again and I now pay in £450 per month which turns into around £540 with government tax relief. It’s a fair bit to pay every month, but I figured if I put in a little more now, I would reap the rewards later. I also put in a lump sum of £5,000 recently which again, turned into £6,000 with tax relief. I could have booked a luxury holiday, or a Chanel bag, but I went for the pension contribution, because I’m cool like that!
Anyway, that’s my contribution because I wanted to give you full transparency and let you know this is something I REALLY do believe in!
Do I need pension if I’m a blogger?
Yes, you need a blogger pension if you intend to retire and you don’t have a massive lump of cash or a lottery win to your name, then you will probably need a pension. If you an employed by a company, then you will have a workplace pension, but if you are self employed like me, you need a private pension to live off in your old age. Whilst workplace pensions are mandatory, private pensions for us self employed people aren’t, which is why we need to take the intuitive. You don’t need to pay in a huge amount of money, but you do need to make regular contributions and you need to start it sooner rather than later.
How Much Should YOU Pay Into Your Pension?
Honestly, this all depends on how much you make, how old you are, how much you can afford to pay in, when you plan on retiring and how much you want to receive every month from your pensions. It’s a bit of a ‘how long is a piece of string’ situation. Honestly, it really depends and you need to find your personal sweet spot of how much you can afford and how much you want in your pot by retirement age. The best way to figure it out, is with a pension calculator.
How Do I Start A Private Pension?
This is actually harder than it sounds and took me AGES to figure out! So, when you have a job, it’s all done for you, you just need to tick some boxes and it’s magically done by the company. Unfortunately, it’s not that easy as a self employed person, you can’t restart an old workplace pension, you need to start a new one and a lot of companies won’t let you open one, without the aid of a financial advisors, which you have to pay for. Don’t get me wrong, financial advisors are BRILLIANT, but you need to pay them and if you aren’t in a position to pay them and pay much into your pension, it might seem like you are spending more on their advice than the pension contributions. My advice, is if you just want to get the ball rolling and open a pension WITHOUT paying into a good, reputable firm, then go for either Aviva or Pension Bee. Both are great, both are free to open and you don’t need a financial advisor to do so. Also if you have an old workplace pension which is dormant, you can easily transfer your old pension into the either Pension Bee or Aviva and get them growing with the market for you.
Pension Bee v Aviva?
Personally, I like both. I would say Pension Bee is easier to set up and manage, it’s also got a great app so you can check in and see how your pension pot is doing and see what it could be worth by the time you want to retire. Where as Aviva is an older company and also do a great job. Also, they are a little more long winded to set up, but they have a SUPER helpful phone line if you need to ask any questions. I can’t comment on Pension Bee’s customer service as I haven’t had to use it. Also, I have a Pension Bee refer-a-friend link which gives you a £50 bonus when you join- I get one too as a thank you! Just so you know!
Why Do I Need A Blogger Pension?
Honestly, everyone needs a pension, you want to be able to retire and you want spare money in your old age. Sure, savings and ISA’s are great, but NO savings account will give you the growth and tax relief that a pension will. It’s basically the greatest savings account you will EVER have, the only catch is, you can’t access it til you retire! And if you are lucky enough to have a job with a generous pension plan, make sure you contribute the full amount you need to, so that you can access that generosity, as a lot of companies will only match what you pay in, they won’t pay the full contribution unless you do, so make sure you know the details and if you need to, up your contribution to get the benefit!
I hope this blogger pension post is of help to you, like I say, I just really want you all to know about pensions and know that if you are self employed, you need to set one up! I’ve told you how much I contribute because I want to show how important it is to me and I hope it gives you the nudge you need to start your own! Also, I’m not a financial advisor, this is just friendly advice and my Pension Bee link is a refer-a-friend code, so if you do start a Pension Bee account, you will get a £50 starting bonus and I will get one too!