It may not be considered the most scintillating of conversations to have with Dad on Sunday but you could be doing him a massive favour! When you and the rest of your siblings are sitting around the dinner table quaffing the odd glass or two of vino and playing games in the olympic kingsway casinos in the computer you could spring the very important question of pension saving on him. He might spill the odd drop or two of Montepulciano however he will recognise this is all in a good cause.

The good cause is naturally his financial health and well-being in retirement which is approaching at a rate of knots. This altruism by family members may unwittingly provide potential benefits for all concerned. Naturally you will want Mum to be provided for when he decides to down tools but also ensure that their current lifestyle will continue.

Unfortunately for many coming up to retirement this may not be the case. Some retirees will suddenly be faced with a reduced standard of living and this can have a knock-on affect on all family members who may feel bound to provide financial support to the family retirees. Although you may think you would step in to help out if required (would you?) you may find it difficult to decide between helping out or sacrificing the new home, or new car or to have to turn down the chance of the kids having a private education.

The reality is we are not saving enough to retire on so the conversation will have added benefits to all at the Father’s Day bash. You might even see a spark of interest at the thought of getting some free money paid by the government when you pay contributions to pension. This means that for every ?100 contribution, the government pays 20% (?20 in this case). The other good news
is that when you eventually come to retire, you can take 25% of the pension pot tax free, although the balance is taxed as income.

You do not need to have earnings to be able to pay in to pension although in this case the maximum allowance is ?3,600 (?2,880 after automatic tax relief). This could benefit Dad once he stops work but still continues to save in retirement. Any additional saving can help to offset the effect of inflation or be intended for specific later life goals.

In the meantime Dad should be saving as much as possible towards retirement. Although he may not be persuaded to pay the maximum 100% earnings in to pension the more he can salt away the more enjoyable his retirement.

And with that pinch of salt enjoy the rest of your Father’s Day celebratory meal.
Pass the Montepulciano, Cheers!