Tuesday 23rd July 2024

Pensions: what could be better than free money?

Helena Wardle, founder of Money Means considers if pensions need an image change to emphasise their passive income benefits, and how to get actual free money.


It’s time to remind everyone why pensions are so great: free money!

Pensions are dull. At least that is what we’re conditioned to think. But this week is Pension Awareness Week so here we are talking about them and why they’re great.

When we think about pensions, we think pensioners and being old, and who wants to spend time thinking about that?

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Penn-shun is an onomatopoeic nightmare. The obnoxious shhh gets stuck in your teeth like a rancid Werther’s Original…

Now compare penn-shun to a silky-smooth term like passive income.

See how those seductive esses slide out like sunbeams? For years now this sultry idea has bubbled on the tongues of business gurus and lit up LinkedIn.

A passive income is when you set up a money-making mechanism, often a side-gig, that requires little-to-no oversight or maintenance.

It racks up the pennies and / or the pounds while you’re busy doing other things. Everyone wants a passive income, but a penn-shun? No ta.

So maybe it’s time to scrap the penn-shun. It’s had its day. We need a successor and I’m delighted to say I have one.

Piffle anyone?

The Piffle, or Passive Income Fund For Later, Everyone,is exactly what it says and more.

See, contributing to your Piffle is magic and it’s open to everyone. In your Piffle cash gets added and tax gets subtracted before a wondrous piece of financial alchemy turns your more money into even more money.

Thus even more money will make its way, passively of course, once you reach a stage in life where work becomes a choice.

Floored? You should be. The Piffle’s three power mechanisms (our P3 [trademark pending]) begin at the fact that your employer has to contribute. It’s what we at Piffle HQ call free money.

Secondly, your Piffle tax breaks offer up to 45% relief for higher tax payers and, again, we call this part free money.

The third bit is Piffle’s secret sauce and it goes by the name compound interest. This is when your interest earns interest on its interest. It’s what we Pifflers call free money

Alright, let’s sober up. By now you’ve probably guessed the punchline: a pension does all of the above.

Unfortunately very few get to the free money parts because hearing the word’s like chewing on a sleeping pill.

Nonetheless, a pension is built of funds that you put in and your employer puts in and the taxman puts in and compound interest puts in …

One day, when work becomes a choice, your pension will slide into your bank account while you’re busy doing other things. It’s a saucy passive income.

The best time to investigate your pension is now. Please review where you’re at and check your employer policy.

Take advantage of the extras and the tax breaks. Keep putting in and let Einstein’s eighth wonder of the world do its thing.

It’s not piffle, it’s your pension … and it’s magical.

Photo Credits: Pexels

Helena Wardle

Helena Wardle is a chartered financial planner, business owner and co-founder at Money Means. Helena loves helping people figure out what money means to them. ⁠She started her first business aged 10 and realised that money, for her, means freedom. It meant the freedom to move thousands of miles away and build a career, a business, a life.⁠

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