Whatever your age, it’s never too soon to start thinking about the ways that you can make your personal pension fund work for you. So you can enjoy a comfortable, and perhaps even adventurous retirement!
Making your money go as far as possible is in your interests, and if you talk to people who didn’t give this consideration you will soon realise what you could miss out on later down the line!
Here are 5 things you can start investigating today:
Boost your pension contributions
Although it’s obvious, those of us who like to live for the moment don’t always consider that increasing their pension contribution by just £30 a month could up their annual pension income by as much as £1,000 a year or more, or approximately an extra £3,000 per year if you were prepared to go up to £100 a month. This will mean that when you are older you can still afford to be spontaneous without too much penny-pinching!
Many employers now automatically enrol employees into pension-matching schemes. This is possible if they are over 22 and earning in excess of £10,000 per year. On the other hand a number of employers now have a new scheme whereby if you put more pension contributions in per month, they will match this amount. However, it’s not always as well promoted as it could be within some companies, so if you are interested check if your employer has this option.
Personal investment pensions
These type of pensions, known as self-invested personal pensions. Also known as SIPPS, they are a new way to have more control over your investments. They provide an individual contract between you and the pension provider. In many pension schemes, the company invests your funds on your behalf. In this type of scheme you have a say in how and where they are invested, including UK and overseas stocks and shares; collective investments; unlisted shares; investment trusts and property and land to name a few.
Lots of helpful advice is online about this way of investing your personal pension so take the time to find out all you can and get further advice if you think this may be for you.
Pension tax relief
You may not be getting the free top-ups you should be from the government if you pay into a pension scheme. Depending on your earnings there are tax relief schemes such as 20% tax relief for basic-rate taxpayers; 40% tax relief for higher-rate taxpayers and 45% tax relief for additional-rate taxpayers.
Consolidate your pensions
If you have built up pensions with different firms over the years, you can get more return by amalgamating them all, perhaps into personal investment pensions or similar schemes.
However, this is only an option if you first check the rules of each scheme to avoid any penalties such as exit fees, therefore, make sure you consider each scheme separately before you decide if this option could work for you.