An auto-enrolment pension is a retirement plan that allows you to automatically contribute money every month to your account, without having to do anything. This way, you'll be able to save money for your retirement while you're still working.
There are a number of different auto enrolment pension plans available, but the most common one is called a workplace pension. This type of pension allows companies to deduct contributions from your salary before tax is calculated, which means you'll end up paying less in taxes overall.
You can also set up an auto-enrolment pension through your own personal bank account if you don't have a workplace pension. In this case, the bank will take care of enrolling you and making the contributions on your behalf.
Whatever route you choose, making sure that you have an auto-enrolment pension will help you save money for your retirement – and who knows? You may even end up enjoying it too!
Auto-enrolment pension overview: the benefits and how it works
If you're over 55 years old, you may be entitled to an auto-enrolment pension. This is a government-sponsored retirement scheme that allows you to have your salary automatically deposited into a pension account every month.
There are a few benefits to having an auto enrolment pension:
- It's tax-free.
- You don't need to do anything special to set it up – the government takes care of it all for you.
- The amount of money that's deposited into your pension account each month is based on your average wage over the past year. This means that even if your income changes between now and when you retire, your pension will still be updated accordingly.
- If you die before retirement, the money in your pension account will be transferred onto your spouse's or children's accounts.
- You can withdraw the money from your pension at any time without penalty – as long as you're retired and have been paying into the scheme for at least 10 years.
Conclusion
An auto-enrolment pension is a retirement savings scheme that allows employees to contribute to their pension savings on a pre-determined basis, usually monthly. This scheme is typically offered by employers as an added benefit to their employees and is designed to help employees save for their retirement. As the name suggests, auto-enrolment pensions are automatic enrolment schemes - which means that employees are automatically enrolled in the pension scheme and don't need to do anything to participate. The main benefits of auto-enrolment pensions include: - Increased retirement savings: By contributing monthly, employees can save significantly more money for their retirement than if they don't participate in the pension scheme.
