There are some very obvious differences between the saving and pension platforms and it would actually be up to the individual to decide on which is best suited to them.
What You Need To Know
Elements such as character traits of the individual and his or her earning capacity would have to be taken into consideration when making the choice between the two options.
There is also the need to ensure the earning capability of the individual is both consistent and guarded. Other deciding contributing factor may include the current lifestyle and future lifestyle the individual expects to enjoy.
Being able to factor in as many points that will play a dominant role in making an informed choice is very important indeed. Therefore there is a need to be a discerning as possible to ensure the choice made now will bring forth the desired results in the future.
Perhaps the most telling difference between the two options is the fact that savings plans are mostly designed in a way where access to the cash is almost always easy and instantaneous.
However the same cannot be said for that on the pension plan where there is virtually no access to the funds until a certain age is reached.
For those who don‟t consider themselves disciplined enough to keep from withdrawing from a savings plan, the pension is a better option.
For those who have a knack for making successful investments, opting for the pension plan not only be rather restrictive, but will also be of no present value to them.
From the taxation angle there are also some differences to be enjoyed which vary between the two categories. There is some tax relief that can be enjoyed for contributions to the pension fund which is not applicable to that of a saving plan.
However the saving interests are not taxable whereas the pension income does have some percentage of tax tagged to it.