Pros and cons of pensions
- Pros
- Cons
- Additional money given by your employer on top of your earnings
- Requires a monthly contribution from you
- You fund is invested over time, which could earn you money
- Growth isn’t guaranteed, and funds can go also go down
- Tax-free lump sum upon retirement
- Relies on you contributing money that you may need now
- An investment in your future
- If you need your money before retirement age, you can lose money in penalties
- Tax relief
- There are tax considerations to be aware of when you build a larger pot
- Pension contributions and investments are handled for you
- Complexity can make it difficult to make decisions, meaning you’re more likely to leave it as it is
- A feeling of security about later life
- If you don’t save enough, your fund may run out before you die