If you’re looking to start building up a nest egg for your retirement days, then there’s no time like the present to start saving for a pension. Putting away regular payments, ideally with a bit of extra support from an employer can help you save a generous amount for your later days. Here are few ways to achieve this.
If 22, your workplace should automatically enrol you onto a pension scheme if you earn over £10,000. This will add thousands to your total when you retire as it will reach to around 8% of your total salary on a yearly basis. It includes:
- Money you put it in
- Your employer’s contributions
- Tax relief
Add more than the minimum
While it’s easier to just add the scheduled amount, the more you add, the more you’ll have for your life’s savings. Finding a financial advisor could also help you make the most of these regular and irregular contributions. Those who have regulated financial advisor by their side could be making far more, as a professional will find them an account which will
- Get an interest rate that will make a difference
- A better account without costly charges
If you want your extra additions to really count, also make sure that you are getting the full tax relief you are entitled to. This is money claimed back from the government by both your employer and any personal pension schemes you happen to be a part of – it’s extra money that’s worth getting a hold of. However, if you’re on a higher or additional rate of tax, you will need to contact HMRC for self-assessment form to claim it. If you think you would like someone to help you with your pension savings, click here for more information.
Find your old pension pots
If you have a few previous employers, you could have a number of pension savings accounts with them with numerous sums of money. These all belong to you, and it may be worth contacting your financial advisor to find out how best to invest them. If you would like to find out what an advisor could offer, just take a look at Portafina’s Facebook page.
Get the full State Pension
You may have heard before that the State Pension just isn’t enough to live off. This may be true, but it is certainly another string to your bow that’s worth having. To be entitled to the full amount, you will need to have been paying National Insurance contributions regularly for 35 years – although not necessarily consecutively. Any missing payments, or ‘gaps’ as they’re know, could mean you don’t receive the full pension offered by the state.
Don’t get fined
You may be surprised to know that there is in fact a cap on how much you can earn into your pension. The maximum you are allowed is £40k, which includes personal as well as employer’s contributions. However, if you’re concerned about this, know that there is a loophole: you can make use of your allowance from the three years beforehand if it wasn’t reached.