5 clever ways to help boost your retirement savings today

Your retirement is something you’ve probably been saving for from the very early days of your career with high hopes for a comfortable post-work lifestyle.

Sadly, research suggests that a large proportion of savers may never realise those retirement dreams. A survey reported by Sky News suggested that one in three could struggle to make ends meet when they retire.

The report also shares concerns that many aren’t putting enough aside for their retirement.

Fortunately, there are plenty of ways that you could boost your pension savings and keep them on track for the retirement that you’d like to enjoy. Read on to discover five clever ways to help boost your pension savings today.

1. Make the most of employer-matched pension contributions

If your employer offers matched pension contributions, it could be worthwhile making the most of this. After all, your employer’s contributions are essentially free money to put towards your retirement.

Employers are obliged to contribute at least 3% of your salary while you contribute 5%. There are some employers who will match a higher level of contribution, so find out what you could be eligible for and see if you could increase your own contributions to benefit.

Remember that you’ll also receive tax relief on your own contributions (up to the limit of the Annual Allowance, which is the lower of £60,000 or 100% of your earnings in 2023/24) to further top up your pension pot each month.

2. Claim the correct level of tax relief

One of the reasons saving into a pension is so tax-efficient is you will usually receive tax relief on pension contributions at your marginal rate of Income Tax.

This means that, for a basic-rate taxpayer, the government would pay 20% of the gross contribution. This amounts to £20 out of a gross contribution of £100. For higher- and additional-rate taxpayers, the tax relief is even greater, at 40% and 45% respectively, amounting to £40 or £45 from a gross contribution of £100.

The catch is that most pension providers only apply 20% tax relief automatically. If you fall into a higher tax bracket, you’ll need to claim the additional tax relief either through your self-assessment tax return or by contacting HMRC directly.

Standard Life has revealed that between 2018 and 2023, a combined total of £1.3 billion of pension tax relief has gone unclaimed. This shows just how many people could be missing out on valuable funds in their pension.

3. Ensure your portfolio is balanced appropriately for your needs

You might be wary of investing in funds that are too high-risk, particularly when your retirement savings are at stake. Did you know, though, that sometimes being too cautious can be just as dangerous for your wealth?

Often, the investments that are particularly low-risk are the ones that offer a much smaller scope for positive returns. So, if you were to opt only for low-risk investments, you could jeopardise your chances of hitting your financial goals.

The most suitable level of risk to take will depend on your circumstances, goals, and stage of life, as well as your personal attitude towards risk. So, make sure you review the risk profile of your investments and balance your portfolio appropriately.

4. Keep track of different workplace pensions

Since the introduction of auto-enrolment in 2012, chances are that you have been enrolled onto a new workplace pension with each new company that you started working for. Consequently, you could have a number of pension pots held with different providers.

This isn’t an inherently bad thing, but it does increase the risk that you could lose track of one or several pension pots. You could also find that you are paying high fees for some or all the pots. This could eat into the returns your money is generating.

As a result, it’s a good idea to take the time to trace any lost pensions you may have and ensure that all your details are up to date with the provider. If you have multiple pension pots, you could consider the possibility of consolidating some or all of them, as this can sometimes reduce the amount you pay in fees.

Pension consolidation isn’t suitable for everyone though, so consult your planner to find out if it’s a good idea for you.

5. Consult a financial planner for bespoke advice

According to research conducted by Royal London and the International Longevity Centre, it’s possible to put a figure on the monetary value of taking financial advice.

Their data shows that when people took advice, over the course of 10 years, their pension enjoyed an average boost of £47,706.

Additionally, those who worked with their planner on an ongoing basis had almost 50% higher pension wealth than those who only took advice as a one-off.

So, if you aren’t already, working with a financial planner could be a simple and straightforward way to ensure you take the right steps to grow your pension.

Get in touch

If you’re looking for a reliable financial planner in Towcester to help you save enough for your dream lifestyle in retirement, we can help.

Email theteam@fortitudefp.co.uk or call us on 01327 354321.

Please note

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. 

Workplace pensions are regulated by The Pension Regulator.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.