Ellie Lister | Monday 14th September, 2020
The 15th of September 2020 is Pensions Awareness Day, an annual campaign created by Pensions Geeks with the aim to help people save for their future and get the most from their pensions. The campaign promotes a series of tours, webinars and workshops across the UK and is supported by a whole host of pension providers, as well as the Department of Work and Pensions.
Why raising pensions awareness is so important for the self-employed
However dry Pensions Awareness Day may sound, we can’t stress enough how important financial wellbeing and planning is for the self-employed community. Without the luxury of a stable salary, a workplace pension and an HR team to set it all up for them, a pension is often forgotten about - and we don't blame them, there’s a lot to juggle when you work for yourself!
So, we hope that by making some noise and spreading the word about the benefits and importance of a pension we might just reach some self-employed people and help them set up their pension sooner rather than later.
Not only are the self-employed community shouldering the extra admin by not having their pension sorted for them, the added jargon, countless paperwork and being put on hold for two hours on the phone to customer service, prevents even more people from setting one up.
According to the most recent research, 76% of the 5 million self employed people in the UK are NOT paying into a pension. That’s why we’ve made it our mission to get rid of all the pension complications. We've brought pensions into the 21st century, made the process super quick and easy to help those millions of self-employed people start saving for their future today.
How we’re treating our self-employed community on #PAD2020
On Pensions Awareness Day, every customer who sets up a Penfold pension through this link will be given £25 in their pension as a welcome & thank you from Penfold!
We’ve also got the chance for one lucky Penfold customer to win £500 straight into their pension pot! All you need to do is answer our seven question quiz for your name & email to be put into the prize draw to win.
Click the link here to take our quiz.
All the answers to the quiz can be found on Penfold’s social media channels and blogs. The winner will be selected at complete random.
Below is a breakdown of some of the BIG pensions facts that may, or may not, help you win the Penfold quiz….
The BIG pension facts
🏛️ Is the state pension enough
The new flat-rate state pension is a maximum of £204 per week, or £10,600 a year, only if you’ve made full national insurance contributions. And, the state pension can only be accessed when you’re 68, however a private pension can be withdrawn from age 55. Although this sounds daunting, the government incentivises paying into a pension by paying you back the tax you’ve already paid…
💰 The government tops up your personal contribution by 25%, or more!
The government’s generous tax relief essentially pays back the tax you’ve already paid on that contribution. For example, for every £1000 you pay, the government will also contribute £250 (Penfold will claim this for you too). If you are a higher or additional rate taxpayer, you can claim even more in your self-assessment tax return. Read here for more. Pensions & Tax rules apply
🤑 Reduce your corporation tax bill with limited company contributions
Contributions into your pension through your limited company count as a business expense. Revenue - expenses = profit. You only pay corporation tax on your company profits. Therefore, offsetting your pension payments as a business expense can reduce your corporation tax bill by between 19-25% depending on the company profit amount. At Penfold, you can link both your limited company and personal bank account with your pension, to mix up your contributions and get the best of both worlds.
📈 Compound interest is magical.
Compound interest means that you earn a return on your initial investment, as well as a return from previous years of investing, so the longer your money is invested the faster it could grow, and it keeps repeating this process to compound even further.
To put this into perspective, if you paid in a sum of £5,000 at age 20 into your pension and allowed for an average 5% growth each year, at 68 years old this could be worth around £54,841.75. Whereas, if you contributed this £5,000 at age 35, at 68 years old this could be worth just under half, at £25,945.80.