A study in to the finances of 50 year olds showed that on average they had £54,000 saved in pension funds. This means they will have paid out more than three and a half times that in tax and national insurance, making financial planning all the more important.
This is mainly due to the fact that the average tax rate is around 17 per cent. Whereas, people who make pension contributions, it’s historically on average between 5-10 per cent. This means more money is being dedicated to tax than it is on the future of those retiring.
Another statistic shows that people on median earnings starting work at 21 will have paid out £114,000 in income tax and £76,000 going on national insurance.
Other statistics also show that people working until the age of 66 from aged 50 and that are on median earnings will find their total tax bill rising to £290,560. £100,000 of this alone will be focused on their retirement planning in the last 16 years of their working lives.
In total, men that work from the age of 21 to 66 will pay around £316,950 in tax and NI during their working lives, while women will only have to pay £247,350.
Admittedly, there are a lot of statistics to wrap your head around but it’s about being on top of it all and there are people that can help.
All of these statics prove why it is important to seek advice to achieve as much certainty as possible about your financial future. Your annuity can improve your retirement fund so it is vital that you chose the right company to maximise your future.