Kim Dickson DipPFS CeMap’s Post

Whether you’ve got 20 years before you retire or just a few, it’s important to have an idea of just how much money you’ll need for a comfortable lifestyle once you stop earning a regular salary. https://lnkd.in/dvRhDYR #richardsonhewittfinancialplanning #retirementplanning #financialadvice

Whether you’ve got 20 years before you retire or just a few, it’s important to have an idea of just how much money you’ll need for a comfortable lifestyle once you stop earning a regular salary. Click below to read more! #MoneyMatters #RetirementPlanning #TakeControl

Whether you’ve got 20 years before you retire or just a few, it’s important to have an idea of just how much money you’ll need for a comfortable lifestyle once you stop earning a regular salary #RetirementPlanning #FinancialPlanning 

Whether you’ve got 20 years before you retire or just a few, it’s important to have an idea of just how much money you’ll need for a comfortable lifestyle once you stop earning a regular salary. #financialplanning #retirementstrategy

As a contractor, saving for retirement is crucial, and knowing your pension options can make all the difference. Ever wondered about salary sacrifice vs. workplace pension schemes? Let’s break it down: Salary sacrifice: 🔹 Sway part of your salary for benefits (like extra pension funds) 🏦 🔹 Save on tax and National Insurance (NI) Example: Earning £30k, sacrificing £3k reduces taxable income to £27k, saving around £360 in NI! Workplace pension: 🔹 Your employer contributes to your pension, giving your future nest egg a boost 🔹 Statutory minimum: 8% of your qualifying earnings (5% from you, 3% from your employer). Let me put it this way: Say hello to Jake. Jake earns £35,000 annually. With a workplace pension, Jake contributes 5% and his employer 3%, totalling £2,800. Jake’s 5% is £1,750, and his employer’s 3% is £1,050. Using salary sacrifice, Jake reduces his gross salary to £32,941, still contributing 5%. The total pension contribution becomes £3,392.94—£592.94 more than the workplace scheme. Salary sacrifice is tax-efficient, allowing contributions up to £60,000 or 100% of annual income, tax-free. Just ensure contributions don’t exceed this threshold, and your reduced salary stays above the National Minimum Wage. Make sense? Good. Both are fab ways to save, but each has its perks. If you'd like to have a chat, send me a DM and we'll hop on a call. #WorkplacePension #SalarySacrifice #PayGuardians

Imagine no longer having to work at 45 or 50 years old. For some that is the ultimate dream. But it's just a dream, right? Not necessarily. Today I met with 2 people in their 30s who could realistically retire by age 50. One has $1M worth of employee stock. The other is bringing home 45,000 ₪ net and is saving a third of it. But, you don't need quite so much. If you approximate the following (just one example), you may also be able to reach financial independence by age 50: ⚡In your mid 30s ⚡Combined pension balance (both spouses together) of 500,000 ₪ ⚡Paying into pension based on combined salary of 40,000 ₪ ⚡Liquid savings of 1M ₪ with savings rate of 10,000 ₪ per month (not including pension) ⚡Planning to spend 25,000 ₪ per month (in today's money, before increasing for inflation) from age 50 If relevant, I can help you make it happen.

📣 Very important topic 📣 The Living Wage Foundation's Living Pension scheme is standing up for UK workers, helping address inadequate retirement savings. The Living Pension addresses the widespread issue of low pension-saving, which affects 4 in 5 workers in the UK, leading to serious financial concerns in retirement. Kudos to the Living Wage Foundation on this fantastic initiative. It's inspiring to see over 25 firms pledging their commitment towards improved retirement savings for their workforce. Together, they're helping to secure the financial futures of their workers' financial future. Let's champion more secure retirements! #LivingPension #RetirementSavings #financialsecurity

Did you know that there are planned changes afoot to workplace pension contributions? Announced in last years Budget, with cross party agreement and subsequent Royal Assent, it is proposed that under the statutory minimum contribution basis of Qualifying Earnings, the Lower Earnings Limit, currently £6,240pa, is removed, so pension contributions become payable from £1 of earnings, whereas at the moment contributions are only payable on earnings between £6,240 and £50,270. In effect this will mean employers currently paying 3%, will have an additional £187.20pa per member, contribution to pay. It will also mean employees will need to contribute more, £249.60 net pa. Coupled with this, it is also proposed that the minimum age that an employee is enrolled, reduces from 22 to 18, meaning that those younger members of your workforce will also need to be auto-enrolled. Whilst not yet rubber stamped, this is very likely to come into force, possibly at some point in 2025. Auto-enrolment introduced in 2012 was always only the first step in addressing the huge pension gap in the UK and these are the first meaningful changes since it was introduced. It will also mean that for those employers who currently have a more generous pensionable earnings definition, for example full Basic Salary, will no longer have such a competitive offering as all employees with salaries under £50,270 will also have contributions based on their full basic earnings under the statutory minimum. If your scheme doesn't already run on a salary sacrifice basis, now could be the perfect time to consider it to try and make these cost increases more affordable. Feel free to drop me a message if you'd like to discuss these planned changes in further detail. #HR #pensions #workplacepensions #autoenrolment #FD #pensioncontributions #salarysacrifice

Salary sacrifice - let your employer fund your retirement 🛣️ Salary sacrifice is a government backed scheme to help employees save for their retirement As long as you earn at least £6,240 a year, employers must also match workplace pension contributions to a minimum of 3% By sacrificing a portion of your salary to be contributed into a nominated pension, both you and your employer will benefit from a reduced tax liability 💰 Let’s create a scenario to illustrate this. Based on a £50,000 salary, and employer matching up to 5% of pension contributions… 🧑🏼✈️Employee salary is reduced to £47,500 🧑🏼✈️Employee contributes £2,500 into pension 👩🏾💻Employer also matches this contribution, totalling the pay go £5,000 across 12 months Employee taxes With SS = £3,126.79 Without SS = £3,293.45 Net change = £166.66 So, the employees pension pot has grown by £10,000 per year (before accounting for investment growth), at a cost of only £166.66 a month 😳🤑 This is beneficial for employers as well as employees. By reducing taxable income, employers pay less in National Insurance contributions 📉 It can also be instrumental keeping staff morale levels high, as their employers are taking a proactive approach in improving their workforces financial wellbeing 😄 This attractive company benefit can also be used to recruit new talent. Considerations ⚠️ 🏚️ Pension fundamentals- many companies, particular smaller ones, may opt for cheap, low value workplace pension schemes. These may involve restrictive fund options, poor administration, and high costs. 🪙 Value vs necessity - whilst this is a lucrative method to accelerate the growth of your pension, not all people can afford to sacrifice any of their pay, which may already be squeezed due to the cost of living crisis 🙅 Some higher earners may have a salary that tapers their pension annual allowance, and contributing over a certain amount will incur further taxes #Pension #Retirement #Tax

𝐔𝐬𝐢𝐧𝐠 𝐬𝐚𝐥𝐚𝐫𝐲 𝐬𝐚𝐜𝐫𝐢𝐟𝐢𝐜𝐞 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐩𝐞𝐧𝐬𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧𝐬 I’ve been supporting an existing client this week to increase their monthly pension contributions. We had already established his existing pension contributions on a salary sacrifice basis, this increase will follow the same method. 𝐵𝑢𝑡 𝑤ℎ𝑎𝑡 𝑖𝑠 𝑠𝑎𝑙𝑎𝑟𝑦 𝑠𝑎𝑐𝑟𝑖𝑓𝑖𝑐𝑒? 🤔 It is an extremely tax-efficient way for you to make pension contributions. It is an arrangement that employers can make available to employees. You (the employee) agrees to a reduction in your salary (or bonus) that is equal to the level of pension contribution you wish to make. In return, your employer will pay this amount directly into your pension. What makes it so tax efficient is because you (the employee) is sacrificing part of your salary, both your employer and you pay less in National Insurance contributions (NICs). You will also pay less income tax. If you are lucky there may also be a further benefit offered by your employer… As your salary will be lower (the bit you have ‘sacrificed’ is being paid straight into your pension by your employer), your employer will pay less employer NICs. This is a 13.8% saving on the part of your salary that has been sacrificed. Some employers will pay this saving into your pension 🎉 For example, say you agreed a salary sacrifice of £500 per month. Your employer would pay this £500 per month into your pension, instead of paying it to you as a salary – as it is not paid as a salary you do not pay any income tax or employee NICs on this amount. Furthermore, your employer would have had to pay the equivalent of £69 per month (13.8% of £500) in the form of employer NICs. If they agree to pay this saving into your pension, you would end up with £569 per month going into your pension. Whilst it is a very tax efficient way of making pension contributions, it isn’t for everyone. This is because salary sacrifice reduces your salary, which could affect things like maternity pay and mortgage applications. Lower earnings may also have an impact on your state pension or other contribution-based benefits such as employment and support allowance. Therefore it is always worth seeking the appropriate advice before making the decision. #SalarySacrifice #PensionPlanning #Tax