At Four Wealth Management, we help clients of all ages to make the most of their pension and have the retirement that they have been dreaming of.
Below are three tips to help you to make more of your pension pot.
Start early
It is easy to focus on immediate financial goals and your retirement may be years away. However, if you continue to put off saving for retirement then you may find that you are unable to save enough into your pension to provide you with the income levels that you would like when you retire.
The earlier that you start to save into your pension, then the more time your money has to hopefully grow in value over time. Even if you cannot afford to save a lot of money, setting up regular monthly savings will make a significant impact on your overall pension pot.
Give your money time to grow
The earlier you start investing into your pension, the longer your money will be invested which increases the chance of your money growing over time. This is called compound interest where you invest money regularly and the returns on your initial investments continue to create additional returns on top.
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Increase your pension contributions when you can
Once you have set up regular monthly payments to a pension, it is important to regularly review the amount you are contributing.
If you receive a pay rise or bonus, you should consider increasing your pension contributions or paying in a lump sum.
Even a small increase can make a big difference over the long term. Investing a bonus or an inheritance could also be a smart way to get nearer that savings goal.
Book a no-obligation meeting now to discuss your pensions
Understand the annual allowance
The maximum you can pay into a pension each tax year while still benefiting from tax relief is 100% of your annual salary or £60,000 whichever is lower.
You can also carry forward any unused pension allowance from the previous three tax years. This means if you do inherit a large sum of money, you can contribute a large lump sum and benefit from tax relief. If you would like to carry forward unused allowance, it would be useful for you to speak to a financial adviser so they can calculate the exact amount you can contribute.
Book a no-obligation meeting now to discuss your pensions
The value of an investment with St. James’s Place 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.
