Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

Six top tips for pension savers

At Four Wealth Management, our Financial Advisers help many clients with planning for their retirement. The earlier you start planning your retirement, the more time you have to save for your retirement. Here are some other top tips for pension savers.

1. Workplace Pension Scheme

The government have made it easier than ever to start preparing for retirement from a young age by introducing automatic enrolment.

What is auto-enrolment?

If you are aged between 22 and the state pension age, earn over £10,000 per year and work in the UK you will be automatically enrolled into a workplace pension unless you opt out. This is arranged by your employer. If you are self-employed this does not apply to you.

Review your workplace pension

Your employer contributes to your workplace pension as well as you. You should look into the rules of your workplace pension scheme, as some workplaces will increase their contributions if you also increase your personal contributions. You should also look at what your workplace pension has invested in, all schemes will automatically select a fund for you and it is up to you if you want to change the investment to better suit your individual circumstances.

You can change your contribution amount at any time or top up with additional lump sums subject to certain limits.

2. Start a Personal Pension

Your retirement is likely to last 20 years or more. Contributing into a personal pension will help towards your having enough money when you retire. You can contribute into your pension regularly (monthly, quarterly, half-yearly or annually) and/ or with one-off lump sums when you choose, subject to certain limits. If you do not earn anything or earn less than £3,600, your annual maximum member contribution limit is £3,600. You can change your contribution amounts at any time, subject to certain limits.

The earlier you start your pension, the more time your money has to potentially grow. Your circumstances are likely to change throughout your life meaning it is important to review your pension regularly. For example, if you get a pay rise at work, you could consider increasing your pension contributions.

Find out more about starting a pension

3. Don’t Rely on the State Pension

The full new State Pension (for those reaching state pension age on or after 6 April 2016) in the 2019/20 tax year is £168.60 per week. The amount of State Pension you receive depends on your National Insurance record, to qualify for the full amount you will need to have a National Insurance contribution history covering at least 35 qualifying years.

The age that you start receiving the State Pension is continuing to rise, therefore if you wish to retire early you should not rely entirely on income from the State Pension. For both men and women, it will be age 66 by October 2020. Further increases to the State Pension age will happen between 2026 and 2028*.

A private pension can currently be accessed from age 55 giving you more flexibility to determine when you want to retire.

4. Take advantage of tax relief

A pension is one of the most tax-efficient ways you can save money for your future. In a personal pension, you pay your contribution net of basic rate income tax (20%) and then the pension scheme reclaims the basic rate from HMRC on your behalf. Any higher or additional rate tax relief that you may be entitled to needs to be claimed back via your self-assessment tax return.

Review Your Finances with Four Wealth Management

5. Plan Retirement Goals

Setting goals for your retirement early will give you more time to achieve your goals.

For example, you could start by creating a rough retirement budget by predicting your monthly expenses. You can focus on reducing your monthly expenses by paying off outstanding debts and your mortgage before you retire. Knowing your approximate retirement expenditure can be used to create a monthly income goal you hope to receive from your pension pot.

Find out more about retirement planning

6. Get Financial Advice

Creating retirement goals and reviewing your current pension pots can be time consuming and overwhelming. At Four Wealth Management, our Financial Advisers are experienced in retirement planning. A Financial Adviser will help you to define your retirement goals and create a plan tailored to your individual circumstances to help you achieve your goals and have a comfortable retirement.

To book a no-obligation review to discuss your retirement planning please call us on 0117 973 0500.

The value of a pension will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.


*Source: Gov, UK State Pension Calculator

Enquire Now

If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

The Partner together with St. James's Place Wealth Management plc are the data controllers of any personal data you provide to us. For further information on our uses of your personal data, please see the Partner's Privacy Policy or the St. James's Place Privacy Policy.

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