Want To Increase The Money You Have To Retire On? Follow These 8 Retirement Savings Boosting Tips
Maximising the amount of money you have to retire will allow you to do more of the things you want when you’ve finished working. More importantly, it can be the difference between just getting by and having a comfortable retirement.
Even with just some small adjustments early on, you can make a considerable difference to the amount of money in your fund. Read on to discover eight ways to boost your retirement savings.
Stay Opted-In To Your Workplace Pension Scheme
If you are aged 22 or over, are employed, and earn at least £10,000 per annum, you should be enrolled automatically into your employer’s workplace pension scheme. You contribute 4% of your salary to the scheme, plus 1% tax relief from the government, and this is then topped-up a further 3% by your employer.
Your employer’s contribution is money you would not get if you opted out – it is effectively free cash! Therefore, opting out of the workplace pension could cost you thousands of pounds.
You can choose to pay more into your workplace pension, as do some employers. Additional payments can considerably boost your pension pot over the years.
Regularly Review Your Pension’s Performance
It is excellent that you have a pension pot and make regular contributions towards your retirement fund. However, it’s not sufficient to merely sit back and let your pension tick over. You may be paying high management fees, or your pension might not be performing at the rate you planned or need.
If you don’t conduct regular reviews of your pension, you’ll be none the wiser. Over 70% of pension holders are unaware of the fees they’re paying, which is a staggering statistic given people will be relying on this fund when they retire.
A mere 1% reduction in fees over a pension’s lifetime could increase its value massively. A similar percentage improvement in performance would have the same increase in value. Therefore, reviewing your pension regularly and taking corrective action can help to ensure your pension pot is growing the way you want it. You can seek assistance from a regulated independent financial advisor to decide what action you should take.
Check Your State Pension Entitlement
The State Pension is unlikely to be enough to provide you with a comfortable retirement. However, it is still worthwhile checking that you are entitled to receive the full amount. For a full pension, you need to have made National Insurance contributions for thirty-five years. These contributions don’t have to be consecutive, but any years under the thirty-five required, known as gaps, will affect the amount of State Pension you receive.
Locate Any Missing Pension Pots
You might have changed employment throughout your working life. If so, you may have been enrolled in several workplace pensions. Even though you have moved on from an employer, your pension pot from that employment is still your money, and you should try to locate it. If you don’t make an effort to track it down, you will not benefit from it. Also, it could be losing money from high fees or poor performance.
Claim Your Full Tax Relief Allowance
Tax relief is one of the significant benefits of a pension. If you are a basic-rate taxpayer, your employer or pension provider should reclaim your tax relief. For higher or additional rate taxpayers, you can claim relief through your annual self-assessment tax return. Failure to claim your full allowance of tax relief means you are effectively giving away free money and an opportunity to boost your pension fund.
Make Additional Payments
Even making small additional payments to your workplace or private pension could give your fund a considerable boost over the years. You can make regular small top-ups or larger one-off payments if you come into some extra cash. Making additional monthly payments of just £50 could grow your pension pot considerably.
Carry Forward Your Pension Annual Allowance
The maximum tax-free amount that you can put in your pension each year is £40,000. This amount is known as your pension’s annual allowance, and it includes both your and your employer’s contributions. Putting more than this amount into your pension pot incurs tax. However, if you don’t use your full allowance one year, you can carry it over to the next. Carrying forward is only permitted if you have used up your maximum allowance for the current year.
Get Advice From a Regulated Financial Advisor
People who seek advice from a financial professional are likely to have, on average, £30,000 more in their pension pot than those who do not. Pensions are complicated financial vehicles, and the regulations around them often change. Getting advice from a regulated independent financial advisor could considerably boost your retirement savings.
It makes sense to have as much money in your retirement fund as possible. Following these eight tips will help you boost your savings, providing you with a more comfortable post-working life.
Before thinking about your pension or retirement, get in touch with a regulated pensions specialist like Portafina or, view the information at The Money Advice Service.