pexels-cottonbro-5585249

Do You Want To Maximise Your Spending Capabilities When You Retire? Try These 8 Tips To Increase Retirement Savings

Increasing the amount of money you have available for your retirement will allow you to have more fun and do more of what you want. More importantly, having a little more to retire on could mean the difference between struggling to get by in your retirement and having a comfortable lifestyle. By making a few minor adjustments, you can […]

-

Increasing the amount of money you have available for your retirement will allow you to have more fun and do more of what you want. More importantly, having a little more to retire on could mean the difference between struggling to get by in your retirement and having a comfortable lifestyle. By making a few minor adjustments, you can increase your retirement fund considerably. Read on to discover eight tips to improve your retirement savings.

Remain in your workplace pension

If you are employed, over twenty-two, and have a salary of over £10,000 a year, you will be auto-enrolled in a workplace pension scheme. The contributions that go into your workplace pension pot equate to 8% of your gross salary. They are made up of your personal contributions, tax relief from the government, and contributions from your employer.

If you opt-out of your workplace pension, you are turning down thousands of pounds of money that you would not have otherwise. You are literally refusing free money. Moreover, you could be considerably worse off when it comes to you retiring from work. Remember, both you and your employer can contribute more than the basic amount, which can boost your pension significantly.

Regularly review how your pension is performing

Having a pension established is fantastic, but you need to keep an eye on it to ensure it is performing as anticipated. A poorly performing pension can result in you being significantly short of funds when it comes to your retirement. Also, if you are paying charges that are too high, your pension profits could be degraded. The result, again, could be your retirement fund becoming diminished.

If you are not aware of the charges you’re paying on your pension, you are not alone. Over 70% of pension holders have no idea of the charges they pay on their pension scheme. However, you must find out what these charges are. If not, you cannot take any action to rectify the situation. Cutting your pension charges by just 1% a year could bank you a considerable amount more in your retirement fund.

For the same reason, it is crucial to understand how your pension is performing. A regulated financial adviser can help you assess how your pension is performing and suggest suitable alternatives if needed.

Check your state pension entitlement

It’s unlikely that the State Pension alone will sustain your retirement, but certainly, it is a nice boost. To qualify for the full State Pension, you need to have made thirty- five years’ worth of National Insurance contributions. These contributions don’t have to have been made during consecutive years, and you can make up any gaps before you retire.

Locate any old pensions

You might have taken out pensions many years ago and either lost track of them or forgot that you had them. This situation is even more likely if you have had several different employers over the years. If so, you could have as many workplace pensions out there.

Despite not contributing to those pensions now, these savings pots belong to you. However, your old pensions may not be performing as anticipated, or they might have high charges levied on them. Either way, your pensions could be losing money, so you must locate them and get them back on track.

Maximise your personal tax allowance

One considerable benefit of saving into a pension is that your contributions qualify for tax relief. If you are a basic-rate taxpayer, your tax relief is reclaimed from the government. Depending on your pension scheme, this process is done by your pension provider or employer. Higher-rate taxpayers must claim their tax relief directly from HMRC when completing a self-assessment tax return. Tax relief on pension payments is effectively free money. Therefore, maximising it will help boost your retirement savings.

Make top-up payments to your pension

Whether you’re part of a workplace pension scheme or have a personal pension plan, making top-up payments can considerably boost your retirement fund. These top-up payments can be made as a one-off lump-sum payment or regular smaller amounts. Even topping up your pension by just £50 per month could boost your retirement fund massively.

Carry forward your pension annual allowance

Your pension annual allowance is the maximum amount you can pay into your pension fund each year, and the current limit is £40,000. Your annual allowance includes contributions made by yourself and your employer. Exceeding your annual allowance means that you could be liable to pay tax on the additional amount. To avoid any additional tax burden, you can carry forward your annual allowance from the previous three years. However, you need to have used up your current year’s allowance before you can carry forward any unused allowance.

Seek advice from a regulated financial advisor

People who seek professional financial advice from a regulated financial advisor have an average of £31,000 more in their retirement funds when they come to retire.

Pensions can be complicated and not particularly fun to deal with, so why not leave yours in the hands of someone who knows what they’re doing? Before thinking about your pension, consider using a regulated adviser like Portafina or, view the advice at Pension Wise.

BEYOUROWNBEYOUROWNWOMAN