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Investment and finance author Paul Claireaux DipPFS has produced figures estimating how much a smoker could save if they quit at a young age.
The projections originally produced in the Investors Chronicle, show that a 20-year-old quitter, who invested the average price of a pack of 20 cigarettes (£7.60) in to a work pension fund, could be close to millionaire status by their 60s.
This sum relies upon the pension investment being matched by an employer contribution of 60% which is available to some employees in some businesses. This also relies on the 20% top up made by the government for lower rate tax payers; though as higher rate tax payers enjoy a 40% government top up, the end result could be even greater.
The estimated sum for a 55-year-old who uses this initiative is £530,000, while a 65-year-old is looking at an even greater sum of £953,865. This estimate relies upon a 20-year-old employee earning £35,000 per year, making high employee contributions of 9.91%, and topped with an employer contribution of 5.94%.
Mr Claireaux says, “Many employers are more generous than these basic auto-enrollment schemes. In which case, employees will be able to build some wonderful pension funds.
“Some employers who are not already offering good DC pension schemes may restrict their pension input to the bare minimum of 3% and some will take advantage of the staged introduction of auto-enrollment – keeping their contributions to a minimum until obliged to pay more.
“Our examples work less well in such cases because any high personal pension input will not be matched to such an extent by the employer.”
These kinds of savings can also be seen if you gave up a daily coffee or weekend take away. However, if you’re looking to quit or just cut down, e-cigarettes can be a great way to make savings as well as wean yourself away from tobacco cigarettes.
Created by ECigarette Direct