The idea of additional voluntary contribution stems
from the inability of the pension pot to take care of the pension’s
expectations, expenditures, medical expenses and other issues arising from the
pension contributions.
Most retirees often discover that their pension Pot
is not enough to carry them through and that
bring us to the idea of voluntary contribution. Most retirees develop one
problem or the other when they discovered that their pension pot is not enough
to carry out coupled with the rising cost of living and the sudden realization
that the money they saved will not be able to cater for their old age.
Old age is what people pray for right from their upward age of 15 years and I
wonder why people feel terrible uncomfortable on advancing old age. The result
has been that bleak rather than happiness.
And according to Richard Evans in an article in the
Telegraph Newspaper he noted that “more than a million people have started a
self-invested personal pension or Sip since their introduction in 1989,
although many run their Sipp with help from a financial adviser.
These plans offer a simple and tax-efficient means to save in a wide variety of investments, from shares and bonds to cash and even, for more sophisticated investors, assets such as commercial property.”
These plans offer a simple and tax-efficient means to save in a wide variety of investments, from shares and bonds to cash and even, for more sophisticated investors, assets such as commercial property.”
The pension Reform Act 2004 and the pension Reform
Act 2014 was explicit on that and it states in section 9 subsection 5 , Any
employee to which the act applies may in addition to the total contribution
being made by him and his employer make voluntary contribution to his
retirement savings account.
The need for voluntary contribution came as a
result of the insufficiency of pension contribution and the inability of some
private sectors to pay accrued pension rights. The need for accrued pension
stems out of the desire of the Federal Government to cater for the period
preceding 2004, where an employee have put in number of years to the organization.
But a situation where the organization what do the retiree do, of course nothing , but if there is
additional voluntary contribution , it can take of any shortfall in the
expectation of the retirees pension pot.
Retirees should make it as a duty to check their
pension from their Pension Fund Administrators or they make online pension
calculator which has in built mechanism capable of calculating the contributor’s
likely expected values and returns
In voluntary contribution, the amount is irrelevant,
it is better to start small, so that you don’t feel unsafe especially when your
salary is meager, and couldn’t carry through you through.
Culled from REGINALD ODUNZE.COM
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