Unlike many other different types of savings accounts, your pension remains relatively untouched for most of your adult life. It’s only added to and amended to increase your savings – you’d never dip into it to pay for a car or rainy day. So, if you’re looking to look after your pension and increase its value, what can be done?
Increase the amount to your workplace pension
On the provision that you’re over the age of 22 and earning £10k per annum, you will have been automatically enrolled in a workplace pension. However, if you’re really concerned about the amount that’s going in, you can always increase the amount going in. After all, on top of your earnings, you will have your employer’s contribution and tax relief. Tax relief is a tax that’s claimed back from the government by both pension providers and employers. You will need to ensure that you are receiving the full amount of your tax relief, as this will ultimately affect how much is going into your pension pot.
Missing out on your workplace pension at all could see you losing thousands of pounds in the first place, especially when you consider that, in total, it will be equal to 8% of your annual salary.
If you’re already on quite a generous salary and are on a higher or additional tax rate, you may need to claim your tax relief via self-assessment from HMRC. If you think you might need help in doing this, then click here to find out more about Portafina’s pension advisory service.
Check it doesn’t exceed the yearly limit
Investing plenty of cash into your pension is an incredibly sensible idea. However, it’s wise to double check that it doesn’t exceed the ‘pension annual allowance’ which is £40k. This total includes everything from both you and your employer. However, if it does, you may not need to worry – you can ‘carry over’ to previous unused allowances from three years beforehand.
Get professional advice
As we all have jobs and personal lives to attend to, it’s understandable that you might not want to spend your time comparing your current pension scheme against all the others that are available out there. A regulated financial advisor will be able to advise you about poor interest rates and account charges that may actually be depleting your pension for later life. This may be why those who get advice on their pensions are far more likely to earn more on their lifetime savings. If you’re interested in the service that Portafina offers, then check out their website and Facebook page.
Take stock of NI and other pension pots
There are two more types of regular contributions you should bear in mind:
- National Insurance: you will need to have made National Insurance contributions for 35 years to receive the full State Pension when you retire. It doesn’t matter if these years run together or were staggered. However, any missed payments or ‘gaps’ will affect what you receive.
- Previous employer pension pots: it’s easy to lost track of the many pension pots you may have from previous employers, but remember that these do belong to you. Enlisting your financial advisor to help you consolidate or keep track of the deals you’re receiving will help make sure you are getting the most from them.
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