5 Best Ways To Boost Your Pension Savings

5 Best Ways To Boost Your Pension Savings

Concerned about how much money you’ll have for retirement? When it comes to your retirement fund, size matters. Of course, the exact amount you’ll need in your pension pot will depend upon your unique situation. The two significant factors are what you want to do during your retirement and when you want to retire.

This blog post aims to inform you of five tips to boost your pension savings. You will also learn how the age you intend to retire compares with others and three factors affecting when you can retire.

5 Tips To Boost Your Pension Savings

1. Start To Save Right Now

When it comes to boosting your pension pot, there is no time to start like the present if you want to make your money grow as much as possible. It is pretty straightforward; the more time you have to save, the more opportunity you’ll have to grow your funds for when you need them.

2. Make Regular Top-Up Payments

Contributing just a little extra each month into your pension pot will reap considerable benefits when you come to retire. Remember, your pension contributions are tax-exempt, and they have the benefit of growing through compound interest over the years and decades of your investment.

3. Stay Within Your Workplace Pension

Workplace pensions may not be as gold-plated as final salary schemes, but they are an excellent financial vehicle for providing you with a retirement income. Of the 8% value of your gross salary that goes into your pension each month, 3% comes from your employer. Opting out of a workplace pension means you will forego this ‘free’ money, potentially losing out on tens of thousands of pounds over your career.

4. Regularly Check Your Pension

You should regularly check your pension to ensure it remains on target to meet your financial goals for retirement. A poor performing pension, or one that incurs high charges, might become eroded and not produce what you expect. Regularly checking will enable you to take any remedial action early enough to rectify the situation. 

5. Work a Bit Longer

Continuing to work even just a couple of extra years could make a significant difference to your retirement income. Your pension grows each year, and you have a couple of additional years of growth from compound interest on your pot. So long as you are working, you will receive tax relief on your pension contributions, so extending your work life could be a lucrative option. 

Three Factors Affecting When You Retire

You may have a set idea of when you want to retire, which is excellent if you do. However, several factors can affect when you retire, and here are three of the most significant:

• Longer Working Lives

People are generally working longer. Indeed, the number of people still working between the ages of 60-64 has risen sharply since 1998. Almost twice as many women are still employed, and the figure for men has increased by 14.3%. For the 65-69 age group, the overall increase has been 15%.

• Rising State Pension Age

The State Pension age for men and women has now reached parity, at 65 years. Womens’ pension qualifying age has risen steadily since 2010, and the age for all is likely to continue to rise in the future. Still, despite being pensionable at sixty-five, almost half of all women continue to work a couple of years beyond this age. 

When planning your retirement, you should consider the State Pension as a basis for your retirement, but not a sole provider. The full State Pension is £179.60 per week (£9,339 a year), and this is unlikely to provide you with the income you need during your retirement. 

• Greater Pension Flexibility

In 2015, the government introduced pension freedom legislation giving people more control over their pension pots. From the age of fifty-five, holders of certain types of pensions can now access their funds as they see fit. One option is to take a 25% tax-free lump sum of cash. You might also have the option to take further lump sums or leave your money invested in providing a retirement income. 

Before deciding to take lump sums, you should consult a regulated financial advisor. They can advise you on your best course of action and discuss the risks to your retirement income and potential tax implications of your decisions. The pension freedoms is not right for everyone and it could leave you worse off in retirement.

If you are considering your pension or retirement, consider using a regulated pensions specialist like Portafina or, view the guides at The Pensions Advisory Service.

By Zoe Price.