The Pension Awareness Day takes place on September 15 each year, aiming to inform people about the need to save more for their retirement. In an era of deep future uncertainty, low interest rates, and financial difficulties the question facing many employees is how to make the most of their workplace pension in order to secure a comfortable retirement.
And although weighing up when you want to retire, estimating how much money you will need for a comfortable retirement and the number of years left until you can actually call it a day could be familiar trains of thought for anyone aiming to plan ahead, the need to seek alternative ways to boost your pension pot could still be there. Thus, in light of the pension awareness day, here are some ways in order to help you make the most of your workplace pension.
Top up your workplace pension contributions
One of the simplest ways to boost your retirement savings is by taking full advantage of your workplace pension. Most UK employers now have a legal duty to automatically enrol you into a workplace pension. Therefore, depending on your circumstances, you can choose to divert more of your salary towards your workplace pension. Combined with your employer contributions sets an easy and sure-fire way to grow your pension pot successfully!
Particularly for employees who are a long way off reaching their retirement age and have a long time to plan ahead it is crucial that they form the nucleus of their savings strategy before considering other options.
Make sure you claim all your tax relief
If you are a higher rate taxpayer making pension contributions to a workplace pension, you’ll automatically receive basic rate tax relief on the contribution. However, any higher rate tax will need to be claimed on your self-assessment tax return. If you don’t fill in a tax return, then you may have to contact HMRC to find out more. As a result, this tax relief could help you in action to benefit from even bigger pension contributions.
Review your workplace pension pot investment
In most cases, you get to choose how your pension pot is invested. This usually involves choosing from a range of funds your provider offers. Moreover, these funds will be weighted differently and will include different levels of risk or potential return. Therefore, you might want to consider moving at least some of your fund into potentially higher-growth assets such as stocks and shares. However, keep in mind that there is no guarantee that you will achieve higher growth. Most importantly, if you aren’t absolutely certain that you understand how these different pension investments work, it’s better to get financial advice before making any changes to your pension investment.
Consider pension consolidation
Pension consolidation is the process of bringing multiple pensions into a single pension pot. It could save you money, while also making it easier to manage your savings in one place. If you’ve got several workplace pensions from previous jobs over the course of your career, consolidating your pensions may be an attractive proposition. Having numerous pensions could mean paying multiple charges. Finally, pension consolidation can make it easier for you to keep tabs on how your savings are performing in order to plan ahead.
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