Sometimes in life, size matters. And when it comes to your retirement, how much you’re going to need in your pension pot is completely personal to you. It boils down to what you plan to do when you retire and how much these plans could cost you. By working alongside a company like Final Expense Direct (Image source here), you can learn about the best options for you when it comes to life insurance and protecting your pension plans. The age you are thinking of retiring plays a part too. In this blog we reveal five ways to maximise your retirement savings. And you can discover how your planned retirement age compares with the nation plus the three key factors that could affect when you retire.
5 ways to squeeze the most out of your pension:
- Adding a little more to your pension every month or whenever you can may make a major impact in the size of your pot. Don’t forget that your pension contributions are tax-deferred and earn compound interest.
- Begin saving right away: there’s no better time to start investing for your future than now. The sooner you begin saving, the longer your assets have to develop, resulting in more money available when you need it. Investing is an important part of how your pension works, check out Portafina.
- Work a few years longer: opting to work a few years longer might make a significant difference in your pot’s value. Compound interest is more beneficial to your pension the longer it is invested. During those additional years, your donations continue to be tax-deductible.
- Make sure your pension is still customised to you when your circumstances change. High charges and bad performance might sap your pot, regardless of the size of your pot. By consulting a certified financial consultant about your pension, you can ensure that your money continues to work hard for you. Regularly assessing your pension will ensure that it stays personalised to you at all times.
- Don’t refuse your company’s pension plan. While final salary bonuses are becoming more rare, auto-enrolment is a bright spot for many workers. Starting in April 2019, your total contributions will be 8% of your salary, with 3% contributed by your employer.
Three factors that could affect when you retire
People are working longer: during the past 10 years, people working between the ages of 60 and 64 has increased significantly. There are roughly twice as many women working now as there were in 1998, and 14.3% more males.
More than 25% males aged 65 to 69 are still working, compared to 15% 10 years ago.
The State Pension age is increasing: A record in the last hundred years, the State Pension age for men and women has been equalised at 65. Since 2010, when it was 60, women’s State Pension ages have steadily increased. Despite the fact that the State Pension age is 65, our research reveals that half of all women (49.6%)1 want to retire at the age of 67.
The maximum amount of the State Pension you might earn every week is £179.60. When preparing for your future, think about if this amount will be sufficient for you to live decently and support the activities you want to do.
There is more pension flexibility: the pension freedoms, which were implemented in 2015, provide over 55s additional alternatives. At 55, you have the choice of accepting an income that includes collecting lump sums or taking it all at once if you have the correct sort of pension. Taking money out of your pension early may not be the best option for you, since it may leave you out of pocket; it should not be seen as a simple method to obtain funds. That is why, before making any major choices, it’s smart to get financial guidance.