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Why boosting your pension matters
Your pension’s likely to be a key source of income in retirement. So it can pay off – quite literally – to pay yours a little attention. Doing so could improve the quality of life you’re able to afford, as well as open greater opportunities. But remember, because your pension’s invested, the value of your money can go down as well as up – meaning you could get back less than you paid in.
Ways to give your pension a lift
- Maximise employer contributions
Many employers offer to match your pension contributions up to a certain percentage. If you’re not contributing enough to get the full match, you could be missing out on what is essentially free money. It’s worth checking with your employer for more details and increasing your contributions if you can.
- Salary sacrifice pension contributions or bonuses
You agree to give up part of your salary or bonus, and your employer pays it into your pension instead. This can reduce your National Insurance contributions and increase your take-home value overall.
- Review your investments
Where your pension’s invested can make a big difference over time. Make sure your investments match your goals and risk appetite. If they don’t, it might be time for a change.
- Pay in a lump sum
Come into a windfall or some spare cash? Paying a lump sum into your pension is a quick and easy way to give it an instant boost.
Things to consider
- Annual allowance
There’s a limit to how much you, your employer, and any third party can pay into your pension each year and still get tax relief – this is known as the annual allowance. For most people, it’s £60,000, but it can be lower depending on your income. Tax rules can change, and the impact of taxation and any tax relief depends on your circumstances, including where you live.
- Your wider financial picture
Boosting your pension is great, but make sure it fits with your other financial goals – like building an emergency fund or paying off debt.
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Need help?
Pensions can be complex, and what’s right for one person might not be right for another. That’s where expert financial advice can help.
A financial adviser can help you understand your options and make the most of your money, in a way that fits your goals and individual circumstances.
How can we help you?
