In the second episode of ‘Practical Financial Planning’ (the third season of the ‘Where Your Treasure Is…’ podcast), Simon and Bex discuss pensions: how they work, the different types and why they are so important.

Some key points of interest covered in this episode include the following:

• Simon introduces the topic of pensions and explains the ages at which they can become available. [01:53]
• Simon goes on to describe the three different types of pensions that are available: State Pension [04:25]; Occupational Pensions, which are divided into final salary defined benefit schemes [06:00] and career average schemes [07:18]; and Personal Pensions [08:35]
• The importance of learning about, and understanding, pensions sooner rather than later is highlighted. [10:11]
• Simon draws attention to the fact that the tax arrangements that apply to pensions make them a very effective way of saving money. He goes on to provides examples including some figures and explaining that by paying money into your employer’s pension scheme, you not only gain from money going into your pension pot that would normally be taken away in tax, you also benefit from a significant contribution to your pension fund by your employer. In addition, the arrangements for withdrawing money from your pension (once you have reached the required age) are also beneficial, for example because 25% of your pension money can be taken out without paying any tax. [12:04]
• Simon talks about the two main issues that can stop people embracing the opportunities and advantages available through pensions: their complexity; and people’s previous experience of them (especially before 2015). [19:15]
• Simon refers to Numbers 8.24-26 when speaking about retirement: ‘This applies to the Levites; men twenty-five years old or more shall come and take part in the work at the tent of meeting, but at the age of fifty, they must retire from their usual duties and work no longer. They may assist their brothers in performing their duties in the tent of meeting, but they themselves must not do the work.’ He suggests that the biblical view of retirement is not that it should be one long holiday but that it can provide an opportunity to serve God in new and different ways. [23:51]
• As ever, please get in touch with us through whereyourtreasureis@freerangepodcasting.co.uk, or on Instagram via whereyourtreasureispodcast. In Season 3 Episode 3, we will be digging into the only other type of investment product that most people will ever need: the ISA, or Individual Savings Account. We hope that you will join us then. [25:08]

This show has been brought to you by Free Range Podcasting.