Find out how we manage the money in your retirement pot.
Managing your moneyHome > NEST for savers > Pensions explained > Why get a pension?
Why get a pension?
It's a good idea to put some extra money away for your future while you're still earning. Most people will still want to do some of the things they do now when they retire, but the State Pension might not cover everything.
Between now and the time you retire the cost of things such as food, petrol and taking a holiday is likely to increase. So you'll need to make sure the money you put away grows more than the rising cost of living.
There are many different ways to put money away and lots of people choose to do it through a savings account or by putting cash into an ISA. However, at the moment bank accounts and ISAs don’t offer very high rates of interest.
That means your money is unlikely to keep pace with price increases.
Helping your money to grow
A workplace pension scheme is one of the best ways of putting money aside for the future. Most will aim to grow your money more quickly than the rising cost of living.
Your employer will normally make a contribution too, so there will be more money going into your retirement pot than with other ways of saving.
You're also likely to get extra money added to your pot through tax relief from the government. At the moment the basic rate of tax relief is 20 per cent. This means that for every £8 you pay into your retirement pot, you'd get an extra £2 from the government.
