Why saving for retirement is important
Plan for your future
Saving for retirement helps minimise financial strain later in life, especially when you stop working or reduce your working hours. The earlier you start saving, the longer your money is invested, so it has more time to grow.
Benefit from the money Schroders pays in
Schroders pays in a percentage of your base salary into your individual account each month, and you don’t have to contribute anything from your salary.
However, if you want to, you can pay in additional contributions from your salary through Options, which is Schroders’ benefits system. If you choose to pay in additional contributions, Schroders will match whatever you pay, up to a certain amount. Take a look at the Our DC Pension Scheme to see how this works and how much Schroders pays in for you.
Any additional contributions you choose to make are paid using salary sacrifice. Under salary sacrifice, Schroders pays your additional contributions into your individual account on your behalf, in return for a reduction in your salary. This is tax efficient because you are not taxed on the amount you pay in.
The money paid into your individual account is invested. This means the amount paid in should lead to a larger pot of money when you retire.
It’s tax efficient
Saving for a pension is one of the most tax-efficient ways you can provide for your future. Once your contributions are invested, they grow in line with how your investments perform*, and will also benefit from compound interest – however, there are some limits to the amount you can save before paying tax.
*The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.
Enjoy flexibility later in life
Planning for retirement helps ensure you have enough money to enjoy a comfortable standard of living – as well as greater financial freedom – when you stop working or reduce your working hours.