Martin Lewis made a man ‘feel sick’ after explaining some harsh truths about saving money for his pension.
Living off your pension might feel like it’s a million years away from now, but the Money Saving Expert has sent a harsh warning to everyone that is currently avoiding pension payments.
Breaking down the figures, Lewis spoke about the importance of saving from an early age, and making it a priority when payday comes around.
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The financial expert appeared on Radio 5 Live and the topic turned to pensions.
"I don't have a pension," host John Robins said.
To which Lewis quickly replied: "That's a mistake."
“At the moment, and this is time-limited, I have a debt to pay off so that’s where my money needs to go,” confessed the radio host. “My other thing is it feels like insurance, thinking I’m giving someone all this money to not have access to it when I'm older.”
However, he soon would be eating his words after Lewis dropped some harsh truths.
“Yeah, but you are giving them money and you are not paying tax on it,” said Lewis, explaining how beneficial this was.
Describing that fact as ‘the ultimate important bit of pension’, the financial wizard then explained that was ‘unbeatable’ considering that elsewhere you pay tax on investments.
Higher tax rate payers could benefit even more, especially as their employer will have to provide a matching contribution which means you invest more for less.
However, this still didn't convinced Robins.
“Yeah, but it is still £100 someone else has,” he complained.
It was then that Lewis made the radio presenter feel the pinch, as he told him just how much he needed to save for his future.
According to the expert, people should take the age they started their pension, halve it, and that is the percentage they should be putting annually into their pension pot for the rest of their working lives to retire comfortably at 65.
For instance, if you began it at 22 then you should invest 11 percent each year to retire at 65.
“I feel sick,” muttered co-host Elis James.
However, Lewis did have some empathy saying that no one listening was ‘doing that’ as he tried to cheer up the melancholy presenter.
Best get putting away those pennies, eh?
Topics: Martin Lewis, Money
Mia Williams