Ways to boost your pension in the run-up to retirement

Ways to boost your pension in the run-up to retirement

Even if retirement isn’t far away, there are steps you can take to increase your retirement income.

  1. Maximise any contributions from your employer

If your employer contributes to your pension plan, they might pay in a bit more if you do too. Some employers increase the amount they contribute when you increase your contributions (which may only be up to a certain limit). If you put an extra percent or two of your salary into your pension plan, they might pay in more as well, and in the long run you could end up better off. Ask your employer for details of whether they contribute to your pension plan, and by how much.

  1. Increase your regular payments whenever you can

Another way of boosting your pension pot is to increase your monthly payments whenever you get the chance. For example, if you receive a pay rise, why not arrange to pay some of it into your pension plan? You can also take this approach any time a regular expenditure comes to an end. If you pay off a loan, for instance, you could pay the extra money into your pension plan. Small, regular increases like this can make a big difference to what you eventually receive when you retire. Over the long term, your pension plan will have a better opportunity to grow.

  1. Pay in a lump sum

In addition to making regular payments, you could also pay lump sums into your pension plan. And as with any personal payments you make into your plan, the Government will top it up with tax relief, up to a certain limit. If you received a bonus from work and paid a personal contribution of £10,000 of it into your pension plan, the Government would add £2,500 in tax relief if you are abasic rate tax payer. It is even more generous if you are a higher or additional rate tax payer

The tax treatment of pensions depends on individual circumstances and may be subject to change.

  1. Review your investment choices

Where your pension plan is invested can have a considerable effect on what you’ll eventually receive when you retire.

You should regularly review how it’s invested. As you get older, it may be appropriate to consider changing your investment strategy to reduce investment risk as retirement draws closer.

Professional Advice 

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