The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
It doesn’t matter how long it is until you retire, whether its twenty years or just a few, there are things everyone can do to give their pension pot a boost to ensure their retirement fund will be in the best shape possible.
Increase contributions when a regular spend ceases
If you make regular payments such as a car loan or credit card for example, when you’ve paid this off you could then use the money to pay into your pension plan. Whether its £20 or £100, over the long term it can make a big difference to your pension.
Whenever you get a pay rise try and pay some of it into your pension. This way you won’t get used to spending the extra money.
Bonuses or lump sums
As with other payments into your pension, paying in a lump sum of cash means the government will top it up with tax relief (certain limits will apply). For example, if you were a basic rate tax payer and you paid £1000 into your pension plan, the government would add at least £250 in tax relief.
Maximise your employer contributions
Some employers increase the amount they pay into your pension plan when your contributions increase (up to a certain limit). Ask your employer for details on how much they contribute. More info on this can be found here.
From April 2019 the minimum your employer will have to pay is 3%. You will pay 5%, which means the minimum pension contribution will be 8%.