After working hard all your life, you are entitled to enjoy your retirement – something which might not be possible if you don’t have enough in your pension pot. The sooner you start saving for your pension, then, the better. If you’ve left it later in life, or are worried about how much you will have in retirement, these five steps will help you make the most out of your pension.
1. Claim Tax Relief
One of the biggest benefits of saving into a pension scheme is the upfront tax relief, which is at least 20% a year for everyone who has a pension (higher earners can claim an additional 20%). Relief can be claimed until you reach 75. To make sure you don’t miss out on this benefit, claim any tax relief no later than four years after your last pension payment.
2. Save for Your Partner, Child or Grandchild
If your spouse, children or grandchildren don’t work, you can save up to £3,600 a year for each of them in your pension pot, claiming the 20% tax relief for each and increasing the size of your pension on retirement.
3. Keep Paying into Your Pension
Even if you have retired, you can keep paying into your pension, and claiming tax relief, until you are 75. This is as good as free money and not to be turned down. Plus, it could help your family when it comes to inheritance tax.
4. Consolidate Pensions
The Department of Works and Pensions estimates most people will have eleven jobs over the course of their working life, making it highly likely they’ll lose track of at least one pension by the time they reach retirement age. Consolidating pensions, then, might be a good idea. Before you do, and to make sure you don’t get hit by unexpected fees, speak to a pension specialist, ideally one that uses software for financial advisers such as that offered by https://www.intelliflo.com/.
5. Review Your Pension Pots Regularly
As with any investment, it isn’t enough just to put your money away and forget about it. Review it regularly to make sure you are hitting your financial targets and that you will end up with enough money in your pension pot for the retirement you deserve.