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Do you want more funds for your retirement? Here are 5 ways to boost your pension savings

12th October 2022 Print

Sometimes, size matters, which is definitely the case for your retirement funds. Of course, the exact amount of money you’ll need when you retire depends on the things you want to do. 

Also, if you plan on retiring early, you will have to accumulate funds in your retirement pot more quickly. Therefore, read on to uncover five ways to boost your pension savings.

1. Get your savings started immediately.

You only have a set amount of time between now and when you retire. You must start saving immediately to give your pension the maximum chance of growth.

2. Make additional top-up payments whenever possible.

Top-up payments significantly affect the size of your pension pot. Even saving regular additional amounts will grow your funds considerably. That’s because you will receive tax relief on your contributions, and they benefit from compound interest, meaning extra growth over the years of investment.

3. Stay enrolled in your workplace pension scheme.

Paying into a workplace pension scheme is an excellent way to prepare for retirement. Although you have an option to leave such schemes, you should only do so in the direst circumstances. If you opt out, you will lose a considerable amount of money. That’s because around half of your pension contributions come from your employer and government tax relief.

4. Regularly check your pension’s performance.

You should check your pension regularly to ensure it is performing as expected and still fits your financial situation and plans. Failing to check your pension could mean your funds become eroded due to underperformance and high management charges. Checking it regularly will allow you to take action to rectify this situation if it occurs.

5. Extend the duration of your pension contributions.

By extending the time you contribute to your pension, you will give it longer to grow. You can do this by working for an additional couple of years past your plans for your retirement date. During these extra years of work, your pension contributions will continue to receive tax relief, and you’ll also get a couple of additional years of compound interest.

When can you retire?

Several factors influence when you retire. Let’s take a look at a few of them.

Longer working lives.

People are generally working longer today than 25 years ago. In fact, there are almost twice as many 60 to 64-year-old women employed today than in 1998. Also, around 25% of 65 to 69-year-old men are still employed, compared to only 15% a decade ago.

Rising State Pension age.

The qualifying age for women to receive the State Pension benefit has been steadily rising since 2010. It is now the same as it is for men. However, the age for both men and women to qualify is likely to increase further in the years ahead, which will likely influence when you can retire.

Also, you should consider whether the full state pension, currently £179.60 per week, is sufficient to retire. If it does not, you will need to continue working or have other financial plans to provide income for your retirement. Avoid financial mistakes, make use of regulated financial advisors such as Portafina before you jump in to big decisions that could affect your future. 

Greater pension flexibility.

Pension freedoms from 2015, now mean you have more flexibility in accessing your pension funds. From the age of 55, many people have the option to take cash lump sums from their pension pots.

Although this provides considerable flexibility, you should be careful about taking too much money from your pension pot too soon. Doing so could leave you with less income when you retire. A regulated financial advisor can help you determine how best to access your pension pot.