You Need To Stop Saving Into a Pension Sooner Than You Think

1 - RETIREMENT CALCULATOR - https://financialeducation.co.uk/reti... - Work out how much you need and how much you can spend in retirement. 2 - GET FINANCIAL ADVICE - https://financialeducation.co.uk/fina... - Need to speak to a professional? We can help you. 3 - EQUITY RELEASE CALCULATOR - https://financialeducation.co.uk/how-... - Use the free calculator to see how much you could borrow. 4 - LIFE EXPECTANCY CALCULATOR - https://financialeducation.co.uk/life... - Estimate how long you might live. When Should You Stop Saving in to a Pension? You stop paying into a pension when the State Pension, a little over £12,500 a year, plus your projected pot already cover the income you need, so every extra pound is only building an inheritance; Pensions UK puts a moderate retirement at £32,700 a year for a single person and £45,400 for a couple. From 6 April 2027 an unused pension left to family can be taxed twice, which turns the old advice to spend everything else first on its head. If you're asking when to stop paying into your pension, whether to take employer pension contributions as cash, or whether your pension will be subject to inheritance tax from 2027, the test is one question of every pound: is this for us, or for them? £10,000 of employer money is worth about £8,500 spent from a pension, about £5,000 as cash for a higher-rate earner, and only about £3,600 if it's left in the pension for a higher-rate child after 75. WHEN SHOULD YOU STOP PAYING INTO YOUR PENSION? Stop when your State Pension of a little over £12,500 a year plus your projected pension already cover your number with a buffer, because every extra pound is then heading to whoever inherits it. Pensions UK's moderate standard is £32,700 a year single and £45,400 for a couple, and plenty of mortgage-free couples live well on less. SHOULD YOU TAKE EMPLOYER PENSION CONTRIBUTIONS AS CASH? Not for money you'll spend yourself: £10,000 of employer money spent from a pension leaves about £8,500, but taken as cash a basic-rate earner keeps about £6,300 and a higher-rate earner about £5,000. WTW found 3 in 4 employers offer a cash alternative, mostly to high earners, and never opt out just to stop. WILL YOUR PENSION BE SUBJECT TO INHERITANCE TAX FROM 2027? From 6 April 2027 most unused pensions fall inside your estate, and if you die after 75 your family can pay 40% inheritance tax then income tax on the same money, so £10,000 reaches a higher-rate child as about £3,600. The government expects only around 10,500 extra estates a year to pay. RESOURCES Pensions UK Retirement Living Standards: https://www.retirementlivingstandards... ABOUT ME I'm Saq Hussain. I have over 25 years' experience in UK pensions, helping to shape pension and retirement strategies for some of the world's largest organisations. Strategic Advisor, EY Pensions Former Director, UK Head of DC Pensions, Benefits & Wellbeing at PwC Pensions and benefits consultant at Aon, Willis Towers Watson and KPMG Living Wage Foundation Steering Group: developed the National Living Pension Standard AS QUOTED IN Financial Times (FT Adviser), This Is Money, The Express and The Daily Telegraph. CONNECT WITH ME Later life care: https://ukcareguide.co.uk Equity release: https://equitymortgagerelease.co.uk Help and advice: https://helpandadvice.co.uk LinkedIn:   / saq-hussain   DISCLAIMER: For educational purposes only. Not regulated financial advice. Consult a qualified adviser before making pension decisions.