Is there an alternative way to provide for retirement (apart from the biscuit tin)?
Pensions are effectively just a tax-efficient wrapper around a bundle of investments. You can save any other way you like, although few methods are as tax-efficient. Tax relief means that every £1 invested costs you 78p if you are a lower rate tax-payer and 60p for higher-rate payers. This is a good incentive to use pensions as part of a broader portfolio of savings including your house and other investments, such as individual savings accounts. The reason your pension has fallen is probably because it is invested in the stockmarket. Over time, equities have historically out-performed cash, so you are likely to retire on a higher income after this initial bad run if you stay invested in equities rather than relying on a deposit account. As a pension is a long-term investment, most experts say savers should keep their pension primarily invested in equities while they are young, moving to safer investments as retirement approaches. I have been paying into a university pension scheme sinc
