Boost Your Pension: 6 Expert Tips for a Secure and Comfortable Retirement

Boost your pension: If there’s anything we wish we could broadcast to the wider population that we’ve learned from our time as financial advisors it would be how to make the most of your pension. It’s something we all have to think about at some point, as retirement is a very real prospect – and most, if not all, of us would like to maintain our standards of living once we leave the workforce.

But a mix of factors, including financial apathy, the rising cost of living and a slowing in life expectancy rates (partially caused by the pandemic) have all coalesced to cloud the way many of us think about life after retirement. The truth is, a well-managed pension and robust retirement plan are more important than ever, plus the benefits of an early retirement can only be achieved though having the means and funds to do so.

How To Boost Your Pension

In this blog, we’re looking at how to boost your pension and give yourself the financial freedom and peace of mind to enjoy your later years. As expert pension advisors dealing with everything from junior pensions to executive pensions and private pensions, here are six top tips straight from the experts here at KGJ.

1. Start as Early as You Can

It cannot be stressed how important it is to start your pension as early as you possibly can. Starting your contributions early fully harnesses the power of compound interest, often hailed as one of the most powerful forces in finance. By beginning to save in your twenties, every pound you invest has the potential to grow significantly by the time you retire, thanks to the ‘interest on interest’ effect. An early start gives your investments more time to weather market fluctuations, and the earlier you begin, the longer you have to build a more substantial retirement fund with relatively smaller initial investments.

2. Take Control of Your Contributions

It’s easy to let your workplace pension sit and slowly grow over the years, but doing so means ignoring vital opportunities to grow funds faster. Regularly reviewing your plan and adjusting your contributions – especially during your peak earning years – can greatly enhance your pension pot. Increased contributions get better value out of tax relief but also maximise any employer contributions, which can significantly grow your retirement funds. Set calendar reminders to review your pension contributions annually and adjust them upwards as your wage grows. This ensures you are smartly investing in your future, making the most of your pension’s growth potential over time.

3. Understand How Pension Investments Work

As much as we understand that many people don’t have the risk appetite to make the leap to investing their hard-earned money, it’s still something everyone should thoroughly research before deciding. If you have a private pension, the opportunities are there to diversify your investments across a range of different growth opportunities – shares, bonds, property, etc – potentially increasing the growth of your pension pot significantly. This is something we have deep experience in advising here at KGJ, and regularly engaging with your pension provider or financial adviser can ensure your investment approach remains aligned with your retirement goals.

4. Tax Relief and Understanding the Pension Tax Framework

Understanding the relationship between tax relief and your private pension pot is vital when you’re looking at how to boost your pension. Contributions to your pension are made from your pre-tax income, which not only reduces your taxable income but also enhances your savings potential. For example, if you’re a basic rate taxpayer, for every £80 you contribute, the government adds another £20 through tax relief, making your total contribution £100. Take advantage of your annual pension allowance as often as possible, it’s the maximum you can save each year while still receiving tax relief, typically £40,000 or 100% of your earnings, whichever is lower.

5. Map Out Your Pension Withdrawal Strategy

Pensions management and making smart decisions related to your money don’t stop on retirement day. Mapping out your pension withdrawal strategy is crucial for ensuring sustainability and tax efficiency in retirement. Understanding when and how much to withdraw can boost your pension’s potential. Start by familiarising yourself with the various withdrawal options available, such as lump sums, annuities or drawdowns – the KGJ experts have written a blog on what these mean and how they can affect your retirement plans. It’s advisable to regularly revisit your pension withdrawal strategy, as personal circumstances and market conditions can change.

6. Don’t Leave It to Chance: Talk to Pension Experts

Relying on the state pension simply isn’t going to be enough for most people to live a fulfilling and comfortable retirement. In these modern times, it’s essential to take expert independent pension advice, to ensure your money is working hard for you throughout your working years so that you have financial security throughout your retirement. With so many different private pensions available on top of state and workplace pensions, an expert pensions adviser will be able to ensure you understand your options, any risk and benefits and how you can boost your pension by making your hard-earned money go as far as possible.

Boost Your Pension: Start Today

Acting on your pension isn’t a task to be left for later in life; it’s an ongoing process that deserves attention and strategic planning. At KGJ, we’re dedicated to helping you navigate the complexities of pensions, ensuring you’re making the most of every opportunity for growth and security. Our experts are here to guide you every step of the way when you’re looking at how to boost your pension. Take control of your financial future and get in touch with KGJ today by calling 01384 390909, emailing enquiries@tpitdev1.uk or through our contact form.