Pension rules in the UK have changes as of today, meaning you may take home less in your pay packet, but your pension will increase.
You could actually add £100,000 to your savings, as the government forces Britons to save more of their take home salary.
Today (April 6) the state requires that five per cent of your salary is put towards your pension.
Workers will be expected to put a minimum of three per cent of their salary away, with the employer topping up the other two per cent.
Money Saving Expert Martin Lewis has revealed he thinks this is one of the best savings plans, but how does it work?
The government explained on its website: “Under automatic enrolment, minimum pension contributions are required to increase over time.
“By law, on 6 April 2018, employers must have increased the amount of their minimum contributions into their staff’s automatic enrolment pension to at least two per cent of qualifying earnings.
“Staff members will have to make up whatever shortfall remains of the new total minimum contribution up to five per cent, including the employer’s contribution.”
The amount will rise even further on 6 April 2019 to a whopping eight per cent, with workers forced to save five per cent of their salary.
However, the rate on interested offered on such pensions schemes cannot be found elsewhere.
State pension 2018 changes
There will also be in increase in state pensions next month, the biggest jump since April 2012.
From April 6, 2018, eligible pensioners will see the state pension rise to £125.97 per week.
Pensioners who are entitled to the full new state pension will see their payments increase from £159.55 to £164.35 per week.
The change means eligible pensioners will be nearly £250 better off by the end of the tax year.
Their annual income will be increase from £8,296.60 to £8,546.20.
Pension age – what is it?
The state pension age is the age you can start to receive your state pension.
It depends on your gender and date of birth.
Individuals can check their state pension on the government website www.gov.uk/state-pension-age.
The Isa deadline 2018 is also a change that Britons need to pay attention to, to make the most of their money.
What is an ISA?
An ISA is an Individual Savings Account which lets Britons save money tax free.
You can hold shares, and unit trusts free of tax on dividends, interest, and capital gains in an ISA.
