This document provides an overview of pensions for beginners. It explains that pensions allow long-term savings with tax benefits to save for retirement. While pensions involve saving like a bank account, the money cannot be easily withdrawn and is intended for long-term retirement savings. The document recommends starting a pension early to maximize growth and advises joining an employer-provided pension if available due to employer matching contributions. Pensions provide a way to save for a comfortable retirement through long-term investments since the state pension alone may not be sufficient.

1. Pensions for Beginners
September 2016

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Pensions sound dull and dreary, particularly when you’re young. Often we
dismiss them as irrelevant because, let’s face it, it’s years until we retire and
there are many more things that could matter before we get there. Then
again, we know that putting some money aside now for when we’re older
probably makes sense, and more and more employers are now giving us the
chance to have a pension, so maybe we should care? Perhaps the reason we
don’t want to think about pensions is because we just don’t understand
some of the basics, and if we did, we might begin to see their importance.
If that’s you, here are a few questions you might have!
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Pensions…who cares!
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What is a pension?
Essentially, it’s a long-term savings plan that allows us to tuck
away money for later life, and get some favourable tax benefits
along the way when compared to other ways we might save.
Is it just like my bank account?
Whilst pensions involve saving, just as we do into a bank
account, the pension is more long-term and you can’t just take
your money out anytime you want. It has the advantage though
that in most pensions, the money we put in is topped up, either
by our employer or the taxman (or both!)
Should I bother with a pension at all?
A pension is just a way to get us saving so we have a better
chance of a comfortable lifestyle in our old age, important when
we’re all living longer these days. For most of us, it is generally
viewed to be something we should do, and the best means to do
it, because unless we’re lucky enough to be very wealthy, the
state pension probably won’t be enough.
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Starter for ten
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Most of us save into a pension scheme provided by
our employer because it’s convenient; after all,
wages are the main way we earn money, so it’s
easiest to tuck a little away regularly from there.
But you can also set-up a personal pension yourself
if you want, perhaps if you’re self-employed or
want to save more for retirement than your
employer’s scheme allows. And of course, the state
can provide us with some kind of pension benefit.
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What types of pension are there?
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Currently, if we’ve worked during our life, we’re
entitled to some kind of pension from the government
when we reach the state retirement age; how much
will depend mainly on how many years we’ve worked.
Of course, what the state pension is right now might
not be the same when we come to retire, and chances
are it won’t be enough to have the lifestyle we’re used
to. That’s why it begins to make sense to save extra
into a private pension scheme.
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What’s the difference between the state and a private
pension scheme?
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6. | ConfidentialHow do pensions work?
These days, most pensions don’t guarantee today what we’re going
to get when we retire. Instead, we build up a pot of money which is
invested along the way. When retirement comes, we can draw
money from this pot in several ways, but how much that is will
depend on what we put in originally, how well that investment did,
and of course any charges that have been made.
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How can I choose a pension?
If our employer provides a pension scheme, and it is now becoming mandatory for all
businesses with employees to do this, then the main choice is whether we want to join
it or not. Given that our employer will add to the amounts we put in, people usually
think it’s a good idea to join; indeed, changes in the law mean that we’ll be
automatically joined up unless we specifically choose not to. Once in, we’ll have some
flexibility to choose exactly how much we want to save, and pick where the money is
invested from the possibilities that our employer provides. And nothing stops us, if we
want to save more, or have greater investment choices, from setting up-up a personal
pension just for ourselves as well.

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When should I start saving into a pension?
For most pensions being started these days, the final amount
that we’ll get in retirement will depend mostly on how much
we’ve saved, and how well the investment has performed, up
until then. Having more time should help, so to have the
maximum chance of a reasonable pot of money, getting going
as early as possible is best. Don’t worry if you haven’t done
anything to date; it’s never too late to start.
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How much should I put in?
Obviously, saving into a pension reduces the money that we can spend now, so it’s a
matter of putting aside what we can, when we can. For a pension provided by our
employer, there will probably be a minimum amount that has to be saved, with the
possibility to put in more if we want. Don’t forget, the taxman currently tops up what is
saved, so that extra money will depend on how much we contribute.

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Can I have a say in how my pension is invested?
Generally yes, there may be a choice of ways in which our
contributions, plus the extra amounts from our employer, are
invested. These choices will probably reflect different levels of
risk. Low risk choices mean less chance that our investment
funds are reduced, but of course give less possibility also for the
final pot to grow, and vice-versa for higher-risk choices. How we
invest is a matter of personal preference, and might vary as our
age and circumstances change
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When will I get my pension pot?
Whilst waiting as long as possible is generally thought to be best, given that it gives
the most time for the pot to increase, we can potentially start to withdraw some
money from our pension when we reach 55. However, there are rules on how much this
can be without you paying back some of the tax benefit, and the provider of the
pension will advise on the various possibilities.

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Employer-provided and Personal Pensions are
normally felt to be a good way to save for retirement,
particularly given that the State Pension is unlikely to
provide us with the lifestyle that we’re used to. In
addition, they give us the chance to get extra money
from the taxman as well as our employer. But they
require giving up some of the money we earn for a
long time (though removing temptation can be good),
and for most pensions started nowadays, we won’t
know exactly how much we’ll get until we get much
closer to retirement.
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What are the main pros & cons of a pension?
Cutting through financial complexity for small business employers

10. | ConfidentialSo where does this leave me?
There are probably other questions on your mind now about a pension, but hopefully,
you’re on your way to understanding what it all means. This information is not meant to
be exhaustive, and depends a bit on you.
A Workplace Pension is actually a valuable benefit, and for many of us, the first chance to
save long-term, so it would be a shame to miss out just because we didn’t know a few of the
basics.
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11. About Husky Finance
Husky Auto Enrolment is a workplace pension service designed specifically for small
and micro size employers. The service allows small businesses to compare pension
providers based on their specific needs.
The service takes care of the ongoing administration required to assess a workforce
accurately, calculate contributions, and ensure small business schemes remain
compliant at every payroll with the lowest effort possible.
T. 0800 044 8114
E.sales@huskyfinance.com
www.huskyfinance.com
NB: This presentation is not for publication and may not be sent to retail investors. It is for illustrative purposes only and may not be construed as an offer to sell or distribute securities.
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© 2016 Husky Finance. Husky Finance is a trading name of Financial SatNav.