Pensions Explained UK | Pension Basics for everyone
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- Опубликовано: 5 июн 2024
- Pensions explained for folks in the UK. We've all been told that pensions are important, but why? Most of us have never had pensions explained to us, yet it's vital to know how pensions work in the UK because for most of us they are the most tax-efficient way of building retirement savings. After watching this video, you'll understand pension basics enough to get started with these crucial accounts.
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Chapters:
00:00 Intro
01:07 1 - Types of Pension
03:47 2 - Free Money with Pensions
05:49 3 - How Pensions Are Taxed
06:44 4 - How Pensions Grow
08:24 5 - How you get your money OUT
11:20 Summary
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📫 Leave me a comment below - I read all of them and love hearing from you!
Well done on expluaing UK pensions in just over 10 minutes.
Nice profile pic Mike.
@@WellOilBeefHooked (This is a joke, obviously....) People really should check their emoji orientation before they click the send button lol
@@tonychan8558 I made you cry
Free money, I agree, but the government will do its best to take it back.
We get taxed on our income, taxed on our savings, taxed on our pensions.
In essence, it's legalized theft!
Thanks for the video. I absolutely agree that too few people know about the best ways they can achieve financial security.
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $275k bond/stock portfolio
You can make a quick internet research with her name *ROCH DUNGCA-SCHREIBER* . The rest of the information is there for you to read and get in touch
I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $300,000. ' John Steven Barr' is among the most accomplished portfolio managers in the industry, widely acknowledged for his outstanding work. I highly recommend taking a closer look at his impressive portfolio.
This is the kind of advice that I wish I'd had from pensions and savings advisers 30 years ago when all the jargon just went right over my head. Thanks for this much simpler explanation which I can now finally understand!
Excellent video... I think it's a discrace (having paid into a pension) the government then turn around and keep raising the age you can draw on it... Its OUR money! France was recently sticking as the their State pension was being raised from 60 - 64 years old. Us Brits really need to grow some Cahoniez.
Agreed, that is a very valid point, I work in finance for over 25 years, I think pensions are very much misunderstood, and the current Government and previous decided to raise the retirement age it is disgraceful (we know why, people are living longer), plus one will be taxed either at the start of the process - when you work (via National Income/TAX) or at the end of the process when you come to withdraw your hard earned cash from the pension. One should look at pensions as part of a good retirement plan with other types of assets or investments. The days of Golden pensions are long gone for most of us. Check out the HMRC Pensions Tax Manual. for example of limp sum commutation examples. I fear future governments will try to raise the age yet again.
Thank You! I pay into a DB scheme and didn't understand it as I thought all pensions behave like DC schemes but this short video has cleared up so much confusion for me. Very clear and very concise.
Thank you for making it so simple ! 🙏
Thank you..I really needed this explaining as we approach retirement and have various pots. I finally understand it now.
What a great video, just wished I had watched it 1st of all, very clearly explained thank you
Super informative pension video uncle Pete, thanx for producing.
Brilliant video and so clearly explained. I think I learned more in this 12 minutes than I did when I sat for 2 hours in a pensions briefing at work a couple of years ago. You have a new subscriber 👍🏼😉
Amazingly helpful video! Thank you so much for making this I have been struggling for years to understand my pension and this really helped
Loved this. Thank you. I'm looking how to combine my other pensions. Not sure how to go about it at the moment but I'm keen on trying to secure some fininacial stability for my family.
Just found this video. Has to be the clearest explanation I've ever come across for Pensions in the Uk. Thanks
Oh wow! I'm so glad I come across this. Pensions have always left me confused. Thank you!
This is possibly the most informative video ever created....
Great Video, I am an advisor from South Africa about to start work in the UK so these videos are super helpful. Thank you.
Very clear, thank you so much for taking the time to put this together and sharing it.
Thank you Stephen - glad it was useful!
Best pension descriptions I've ever heard. So, so useful
Thank you, LC!
Love this series. I wish I knew all this 20 years ago!!!
You weren't interested in it 20 years ago.
Very simple explanation on DC. Thank you!
Finally, after more than 10 years, I understand how pensions work.
I'll take that, Samuel - thank you!
Smashing video. You have a great style that makes potentially boring topics interesting and easy to watch. Cheers.
Thank you, VP - you’re very kind!
Great clear intro. Thanks
Love this channel. Great video as always thank you 🙂👍
You’re very kind, thank you 👍🏻🙏🏻
VERY SIMPLE WAY TO EXPLAIN. THANK YOU
Solid video Pete! 👍
Great video! Informative & engaging!
Very well explained. Thank you. ::))) very good!!
This is the best video and explanation on how pensions work put in simple terms. Thank you and well done.
I have subscribed to this channel. 10/10
Thanks very much - I’m delighted it was helpful for you! And thanks for the sub 👊🏻👍🏻
Very useful and clearcut video thanks 😊 👍
Really great video for explaining the basics. Do you have a video explaining how pensions work for people who have ill health and are unlikely to make it to those 60's and 70's?
Alongside salary sacrifice pension arrangements, my employer also does a salary sacrifice for car leasing electric vehicles, but this can affect your pension detrimentally, would like a Meaningful Money explaining this complex issue!
Am 59, first time I understood what a defined benefit is! Am an oral learner, ur voice, choice words made it so sonically fluid that it seeped into my synapses. There is no other way of saying thank you, then elaborating on how succinct your video is
I do love a pension video, thanks! I think I saw some content you did on salary sacrifice a while back which was really helpful too, I've just learnt that salary sacrifice is limited by the minimum wage which I wasn't aware of before. Given the upcoming N.I increase I think more people will be looking at their salary sacrifice schemes in the hope of recouping some of that cost.
You could well be right…
Thanks for the basic explanation. I, like many have always struggled to understand ‘Pensions’. I fully understood your video. Subscribed as a result.
Great why of explaining pension...
Really good video, you explained the concept very clearly. The illustrations are really good.
Thank you Shree!
Thanks again. Another good video. Your explanation is so easy to understand. I would recommend this channel. Thanks
Thanks Chris - really appreciate that! 🙏🏻👍🏻
Very clear explanation, thanks.
Good stuff ! Very informative. I worked in the financial services industry for around 8 years leaving around 1994. I then went work for a good company that had 1/60th scheme and AVC contribution got this down to 56th scheme (22years service) This year it folded because the final salary scheme costs a fortune to maintain so I am now in a DC scheme ! Because my employer closed the DB scheme they are giving us an £8000 x2 bonus into the DC scheme. I am 58 now and tend to bail out in 2 years at age 60. My only concerns at going at 60 is I will have to mantain my NI contributions ! Draw down all the way. Taking benefits from DB scheme ! I could pass away and my kids wouldn't get a penny unless I elected for this hence reducing my pension. Thanks for sharing
Thanks so much - this video was super helpful!
I’m glad, Timera - thanks for watching!
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways
Indeed, the recent market downturn serves as evidence that a vast majority of individuals lacked a sufficient understanding of the underlying financial dynamics at play.
Given that we are not accustomed to such uncertain markets, the fact that the US stock market has been on its longest bull run ever makes the widespread anxiety and excitement comprehensible. There are opportunities if you know where to go, as you noted that it wasn't difficult for me to earn more than $780k in the previous 10 months. Since I was aware that I would need a reliable and strong plan to get through these tough times, I engaged a portfolio advisor.
@@corrySledd My portfolio has been in the gutter for the entire year, so I started researching new ways to profit in the market, but everything I tried just seemed to miss the mark. Please let us know the name of your financial advisor.
@@Blitcliffe My advisor “NICOLE DESIREE SIMON” is highly qualified and experienced in the financial market.She has extensive knowledge of portfolio diversity and is considered an expert in the field.
@@corrySledd I just Googled her name and her website came up right away. It looks interesting so far. I'm going to book a call with her and let you know how it goes. Thanks
great explanation...i'm going to use this videos advice in my job interview in the hope I can get a job working with pensions.
I admire the financial independence of people, But you can live better if you work a little more. After watching this I think there are people out there, on the extreme, who plan to die early just to be able to retire early. To each their own but to me, retirement isn't just about not having to work, it's about having the freedom to do whatever you might reasonably want, such as travel, buying things, enjoying life, etc. I don't think I could retire with less than $3m in income-generating investments, maybe $2m at the very minimum. I plan to work until I'm at least 45
Nobody knows anything, you need to create your own process, manage risk and stick to the plan, through thick or thin while also continuously learning from mistakes and improving
Having an investment adviser is the best way to go about the market right now, especially for near-retirees, I've been in touch with a coach for a while now mostly cause I lack the depth knowledge and mental fortitude to deal with these recurring market conditions, I netted over $220K during this dip, that made it clear there's more to the market that we avg joes don't know
credits to *MARTHA ALONSO HARA* , one of the best portfolio managers out there. she's well known, you should look her up
I just checked her out and I have sent her an email. I hope she gets back to me soon.
45 would still be a very early age to retire!
Very well explained in quick and short video.
Thank you Sandeep! 🙏🏻
This is the best explanation of Pensions I ever come across, and should be taught at school and shared by employers. Great job! Thanks
Very kind, Pablo, thank you! 🙏🏻
Absolutely agree with this, fantastic and thank you
Schools would rather teach religious education and pshe
Really well presented and very helpful! Thank you
Cheers Dav - glad it was helpful
Finally something that is explained in terms I can understand, thank you 🙏
You're very welcome - glad it was helpful!
Great video Pete I wish I knew all this in my 20’s 😮
very insightful and I really admire your energy
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As other commentors have said - that was very well explained. Thanks.
Very helpful! Thank you.
Really glad, Aidan - cheers!
Subscribed,,,! Bring it on..
Great videos and great channel! Your videos have helped me change the way I think about my finances and budgeting. Would you consider doing a video explaining the NHS pension?
I did a podcast on that subject with an expert, Oliver: meaningfulmoney.tv/2021/09/08/the-nhs-pension-scheme-explained/
This is so informative, thank you!
Glad it was helpful!
Hi Pete, love the videos! A quick question for you... can you pay the maximum (100% of relevant earnings, only £5k inc tax relief) into a PP then take an Ufpls payment which will trigger the MPAA and then pay in £4k inc tax relief in the same tax year if you have no further earnings after the trigger date?
Thanks for the knowledge!
very helpful video, thankyou so much
Brilliant. Thank you
Nice clear explanation.
I am so glad that I came across this channel! The wealth of financial knowledge in your videos is astounding, I genuinely don't know how I'm not surrounded by millionaires with information like this being so accessible.
Yes, subbed
I have no idea why this information isn’t more widely known. Brilliant explanation and has helped my understanding.
What is boggling my mind though, who on Earth are the people who gave this a thumbs down???
Ha! There are always some. And thank you - I appreciate the encouraging words...
Great video. I worked for a very large and well known company and have recently become a pension rep. Its a voluntary role but I'm passionate that all employees, particularly the younger ones, get educated to know their options available. The company only offers DC now to new members but its pretty generous at 8+12 but some newer joiners are still in the auto enrollment level. Fine that everyone's situation is different when it comes to what they can or want to save but I just like to make sure they are aware if all the options and figures. I'm really enjoying it.
This is really important work, JD. I’ve heard countless time from people who were encouraged by older colleagues to join the workplace pension, and they always so glad they did, down the line. Brilliant work - keep going! 👊🏻👍🏻
Many thanks... really useful
Absolutely brilliant video, easy to understand even for a thicko like me, thanks
You’re certainly not a thicko! No one is born knowing this stuff!
Hi Pete, can you claim the higher rate tax relief on a workplace pension? Great work 👍
Great job best explanation
I think this also applies to some other countries too~~! thank u~~!!
Thank you very much. This is very useful.
I’m glad, Carole - thanks for watching!
Great video. I'm in my 30s but I am now planning for retirement (although I should've started in my 20s). New subscriber here!
At 30 we should be living our prime not thinking about enjoying retirement. Our life's are in reverse, not how it should be.
@@jaleelaslam7341you have a poor mindset buddy
Great videos thanks. I was hoping to reduce CT from my limited company by paying in employer contributions to my SIPP. I’m now told that as I drew £6k from my SIPP back in 2016 I am only now allowed to pay in £10k per year which sounds crazy and somewhat unfair. 😢
Thank you, great video. Kinda simple ;-)
Very helpful thanks
Great video! I have a SIPP as well as my employer's DC pension. As well as consolidating my old pensions to the SIPP, I like the flexibility of being able to add contributions on the fly (which payroll contributions don't do so well)
How does that work regarding taxation and contributions..not sure if my employer is matching my contribution or how well invested my work place pension is.
@@goodlifeliving1667 If you're in the UK and auto enrolled there is likely some level of matching. I've never had to worry too much about hitting contribution limits though. For taxation, 20% relief is applied by the broker, if you are a higher rate payer you put extra on a self assessment or I expect there is another form to claim with.
This was SO valuable you have no idea...
I’m glad - thanks for watching!
Wonderful!
Great video on pension and investment. I just came across your channel and I have subscribed immediately. I really need educating on investment and pension. Thank you
Great to have you here, Tola! 👊🏻
Great video!
Glad you enjoyed it, Jethro!
Took me 30 years to understand how this works. God bless you.😂
Great video. Excellent production values. Really great content.
Thank you. Is there any tax on the dividends paid on the shares in the pension pot? I had heard they were taxed at 10% but cannot find anything to confirm this.
Nope. There used to be, back in the late nineties and early 2000s, but dividends are paid gross on any investments, including those inside a pension, and inside a pension there’s no tax to pay.
(And thank you!)
Good video. Am I right in saying a pension is almost always better than an ISA because you wouldn't pay any tax (income or NIC), assuming you draw down less than the basic tax rate amount per year during your retirement?
Amazing thanks
Very helpful
Thanks for the nice explanation. From what I understood, it seem better to invest in properties and rent it than going into the DC. Rent income is pretty much like DB.
Different, not better. Property is a great asset class, but very tax-inefficient and illiquid. Fine if you have tenants, but income drops to zero if you don’t. If possible try to get to the point where you have multiple strings to your bow - property AND pensions?!
Thank you 🙏
Nice job
Great explanation, but also exactly how I understood pensions. I thought I might’ve been missing something when many ppl say how good it is.
In any pension, I don’t like how the money feels like it’s being held hostage. There’s always the risk of dying before getting it - I’m aware if terminal you can withdraw early. But I guess if ur dead doesn’t really matter either way 😅
In theory if stock market dies, it’s not worth anything right. Never say never.
I have no faith in state pension as gov can change goal posts at any point - I.e. age limit or tax percentage etc.
I realise that due to being low income, it’s actually quite a big chunk to pay when I need the money now… or at least have flexibility with money.
I wonder what the alternatives to pensions are, since it just seems like an investment. I have a lifetime isa for a house, where gov adds 25%. Feels like we need multiple investments
10mins 21secs, thats the bit that concerns me! when i mentioned this to my pension company they flatly refused to offer me anything!! stating that it was too early!!
Hi Pete, can you possibly elaborate on hybrid pension schemes, such as USS, a bit in a future video? I am a bit confused about how the lumpsum works on it.
Noted, Sagnik
Have you ever covered DB Guaranteed Minimum Pensions, how they increase each year and if they affect your state pension? Totally confused about this and my small Post Office pension!
Don't think I've ever covered that - it's a pretty niche subject, but I suppose it does still cover lots of people! Noted for the future...
Thank you so much for this clear video, I have one question pls - in case of a personal pension, why is employer obligated to contribute equal amount?
In my case my employer already provides pension as part of compensation benefit but I am thinking of opening a separate personal pension account
You didn't mention state pension, I know it's not much, but surely worth mentioning. Still a very useful video. I wish I knew more... Off to watch more videos 😊👍🏼thanks
Tons of content on the state pension on this channel. Thanks for watching!
Great video thank you for explanation of pension in the UK. I wonder one question you might know that do l need to be an Uk citizen for retirement even if l work in UK ? You can assume, l pay my taxes and everything to UK government. Thanks again for the video l subscribed to your channel 👍🏻
great video.
I’ve been watching and listening to the podcast for around 6 months now i’ve become slightly obsessed with investing and saving my money. I’m 21 and have set up monthly direct debits to my Vanguard personal pension, contribute 6.5% into my workplace DC pension, my Fidelity ISA and my Hargreaves Lansdown LISA.
I’m very happy and grateful that i found out about investing at my age and have been telling all my friends about investing and now they all have direct debits into their ISAs and pensions.
Thank you Pete
Wow, you are doing brilliantly. Dont forget to grow an instant access emergency fund (possibly mostly un premium bonds) of 3 to 6 months expenditure - its crucial to have this so that you ding gave to sell shares when the market is down. When the market falls it often coincides with when people need to fall back on some savings.
Meanwhile to encourage you ghost your doing the right thing this video from some US financial planners will blow your socks off.
ruclips.net/video/pKaiBNA6B-I/видео.html
Brilliant stuff, FRANK! 👊🏻
Sensible lad. You’ll go far 👍
I admire your desire to provide for yourself, too many people these days look to the state to provide for them. It's better to be obsessed with your financial future than uninterested and blasé. I wish I had been more interested when I was your age. Luckily I had a great father and the best advice he gave me at 22 was to open a private pension, as at the time I didn't have a workplace pension. I now have a workplace DB pension and the pot I accumulated in my private pension.
What’s the name of podcast
great video
Thanks!
Another great video thanks Pete. I have a DB pension which will remain at the same level through retirement, is there a standard set of figures/assumptions used to calculate the reduction in buying power over time to forecast future income?
Hi Philip. No accepted standards, I don’t think. FWIW, I use 3% inflation across the board in all my plans. It’s a reasonable long-term average. Your scheme will have its own indexation figure, so use that when you’re planning
Thanks so much Mathew for the good work. You have taught me so much. I have learnt so much in 3 day watching your channel than I did in 30years. I have a question, I work with the NHS, I want to know is it possible for me to have another private pension outside my NHS pension? Secondly will that affect my ISA account which I invested in S&P index with vanguard? Thanks, looking forward to hear from you.
When the future comes everything change’s if you get anything promised you will be very lucky I’ve been there believe me
Very true
Hi mate, I'm 56 years old a physiotherapist who worked with Nhs for about 3 years and also worked as a locum pt for a couple of years with Nhs. Last 9 years worked abroad.
Now I'm back in the UK his can I find out how much I awe the government to get retired?
Will be happy if you advise me, please
thank you