How To Boost Your Pension
Even if retirement is still a little way off, it’s not too late to take steps to increase the income you’ll receive from your pension. The key is not to put it off. Swift and decisive action now will yield dividends later, so here are some ideas for growing your pension fund.
Savings accounts are offering poor returns at the moment, so your money will work harder for you when it’s invested in your pension. If you increase your contributions to your workplace or personal pension, you will benefit from it immediately in the form of tax relief, particularly if you pay tax on your earnings at a higher rate. If your employer is contributing towards your pension, that‘s effectively free money, so make the most of it!
Pension Fund Advice
If you have any pension funds which don’t seem to be performing well, you can always transfer them to another provider. Professional help from an FCA (Financial Conduct Authority) approved independent financial advisor can be very useful in identifying the best home for your pension fund, while helping you to avoid any missteps.
National Insurance Payments
Remember that you can maximise your state pension, too. To receive the full basic state pension from 6th April 2016, you will need to have paid at least 30 years’ worth of National Insurance contributions. If you have completed fewer years, your state pension entitlement will be proportionately less. If this is the case, don’t worry, as you can make voluntary contributions to fill the gaps and bring your contribution record up to where it needs to be. Additionally, a new class of voluntary National Insurance contributions is being created by the government from October 2015. These 3A contributions can be paid in return for a higher pension.
You may be eligible for Pension Credit. This benefit guarantees pensioners a minimum income. However, you have to claim this top-up. To find out if you qualify, click here.
Finally, don’t claim your workplace or personal pension if you think you don’t need it yet. Remember that the longer you leave it, the more time your fund has to do its work providing a return on your investment. You can defer your state pension, too. If you reach state pension age after 6th April 2016, there are new rules in place which mean that by putting off collecting your pension by at least a year, you’ll receive an increase of about 5.8%.
With a little forethought, you can make your retirement even more comfortable.