other European schemes<\/strong><\/a> here.<\/p>\nSave as much as possible, as early as possible<\/p>\n
This one may seem obvious, but it\u2019s worth reiterating. The more money you put into your pension pot, the more likely you are to have a stellar retirement income. If you contribute when you are young, it also means that your investments \u2014 in the case of a personal or workplace pension \u2014 have time to grow.<\/p>\n
\u201cOne key way of boosting your pension is to try and increase your contributions wherever possible,\u201d Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, told Euronews.<\/p>\n
One way to do this, she explained, is by boosting contributions every time you get a payrise.\u00a0<\/p>\n
\u201cYou aren\u2019t used to having the extra money in your pocket so it\u2019s easier to portion some of it to go into your pension,\u201d Morrissey explained.<\/p>\n
Negotiate with your employer<\/p>\n
In the UK, most employees are automatically enrolled in a pension scheme. Generally, you will pay 5% of your wages into your pension pot, and your employer must make a contribution worth at least 3% if you earn over \u00a36,240 a year.<\/p>\n
\u201cAuto-enrolment minimum contributions are set at 8% – this is a good start but ideally you need to be contributing more to get a good retirement income,\u201d said Morrissey.<\/p>\n
She explained that some employers will offer more generous rates than 3%, sometimes matching your contribution level.<\/p>\n
Another option on the table is a salary sacrifice scheme. Your employer may let you reduce your wages or bonuses and instead allow you to funnel this money into a pension, topped up by employer contributions.<\/p>\n
As well as paying less income tax on this money, this also means that you and your employer will pay lower National Insurance contributions.<\/p>\n
Stay engaged and informed<\/p>\n
Staying on top of your pension plan is an important part of building a nest egg, said Claire Trott, divisional director of retirement & holistic planning at SJP.\u00a0<\/p>\n
\u201cOnce a year \u2014 as a bare minimum \u2014 work out what you’ve got, what you\u2019re likely to get, and whether it will be enough for retirement,\u201d she explained.<\/p>\n
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When it comes to private and workplace investments, one way to engage is by carefully choosing where your contributions are invested.<\/p>\n
Workplace contributions will be placed in an average fund designed to suit all employees, which may not necessarily be your best option.<\/p>\n
\u201cThe default fund might suit what you want to do. But for the majority of people, it’s just okay. And you might be able to do something more with your money,\u201d said Trott.<\/p>\n
Make use of different financial products<\/p>\n
Saving for retirement doesn\u2019t have to simply revolve around a pension fund, as there are lots of different products on offer.<\/p>\n
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\u201cPension savers can also utilise their tax-free ISA allowance to run alongside their pension,\u201d Lucie Spencer, partner in financial planning at Evelyn Partners, told Euronews.<\/p>\n
\u201cMoney invested \u2026 can grow free of tax on income or gains, which is ideal for retirement saving. Take note, however, pension saving effectively increases your basic rate tax band to reduce income tax whereas savings into an ISA are withdrawn from net income.\u201d<\/p>\n
In other words, withdrawals from ISAs are tax free but the money put in is taxed.<\/p>\n
Don\u2019t take your pension until you need it<\/p>\n
The age when you can access your state pension \u2014 which is separate from the workplace pension and built up through National Insurance contributions \u2014 is currently 66. For those born after 6 April 1978, it will be 68 years old.<\/p>\n
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On the other hand, you can currently take a private pension, including some workplace pensions, from age 55. This will increase to age 57 from April 2028.<\/p>\n
Unless you need to, many advisors warn against taking your pension until you need it, as leaving it untouched allows the investments to grow. On top of this, taking your pension while earning can push you into a higher tax band \u2014 and you also don\u2019t want to risk running out of money.<\/p>\n
Think about consolidation options<\/p>\n
It\u2019s now very uncommon for people to stay with one company for their whole career, although job hopping has consequences for retirement planning.<\/p>\n
When you start a new job, your workplace pension doesn\u2019t automatically follow you. This means you can choose to keep your old pot separate from your new one, or you can consolidate it.\u00a0<\/p>\n
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\u201cConsolidation does mean admin is a lot easier when you want to start taking your pension, as it\u2019s all in one place,\u201d said Claire Trott.<\/p>\n
Even so, she explained that grouping pension pots means you may lose out on scheme-specific perks.<\/p>\n
\u201cOne particular scheme may be better than another one. So if you\u2019ve got an old scheme, anything pre-2006, they can have really great benefits that you wouldn\u2019t have in one started today because of legislation changes,\u201d she said.<\/p>\n
Take advantage of \u2018carry forward\u2019 rules<\/p>\n
Evelyn Partner\u2019s Lucie Spencer also advised people to look into \u201ccarry forward\u201d rules, which allow savers to access unused tax relief from the last three tax years.<\/p>\n
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You\u2019re only allowed to pay a certain amount into your pension each year before normal income tax rates kick in. The standard annual allowance for the 2025\/26 tax year is \u00a360,000, but \u201ccarry forward\u201d rules mean that this can be topped up in some cases.<\/p>\n
\u201cA large bonus, for example, can be put to work in a pension, with a saver potentially able to make a gross pension contribution of up to \u00a3220,000 before the end of this tax year on April 5, 2026, if they have not used any of their pension allowances from the previous three years,\u201d Spencer told Euronews.<\/p>\n
Don\u2019t neglect your state pension<\/p>\n
Finally, experts said it\u2019s important not to forget about your state pension \u2014 although you won\u2019t be managing investments in this case.<\/p>\n
The amount of money paid out by a state pension is determined by a saver\u2019s level of National Insurance contributions, which depends on how many \u201cqualifying\u201d years you\u2019ve worked.<\/p>\n
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To get the full amount, you need to have accumulated 35 qualifying years, and you need to have at least 10 years to get anything at all.<\/p>\n
\u201cChecking your state pension entitlement on the HMRC app for any gaps in your record is important,\u201d explained Lucie Spencer.<\/p>\n
\u201cWhile the deadline to plug gaps all the way back to 2006 has now passed, there is still an option to pay for missing years over the past six years. Buying back missed years can be a great way for people to bolster retirement income as the state pension provides a guaranteed monthly income for the duration of your retirement,\u201d she said.<\/p>\n
While the state pension typically requires less management than workplace and private pensions, it’s still a key part of retirement planning.<\/p>\n
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\u201cA reminder, the information in this article does not constitute financial advice, always do your own research on top to ensure it’s right for your specific circumstances. Also remember, we are a journalistic website and aim to provide the best guides, tips and advice from experts. If you rely on the information on this page then you do so entirely at your own risk.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"ADVERTISEMENT With the cost of living rising in recent years, many Brits are struggling to put money aside…\n","protected":false},"author":2,"featured_media":90712,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,487,474,1232,617,2499,2250,3028,16,15],"class_list":{"0":"post-90711","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-cost-of-living","10":"tag-finance","11":"tag-money","12":"tag-pensions","13":"tag-personal-finance","14":"tag-retirement","15":"tag-savings","16":"tag-uk","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114484972506062481","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/90711","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=90711"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/90711\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/90712"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=90711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=90711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=90711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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