3 of the best things you can do for your pension right now
It can be really overwhelming to know where to begin when it comes to your pension. All you know is that you have to save a hefty amount of money before you can retire, and that’s daunting! But it’s not all on you – there are lots of things working in your favour to help you build a healthy pension pot. Here’s three simple things you can do today that could make a big difference to your retirement savings.
1. Check that you’re making the most of employer contributions 💰
If you’re under employment and paying into a workplace pension, your employer is required to also contribute to your pension. Usually, you’ll contribute 5% of your earnings and your employer will contribute 3% of your earnings. However, some employers will increase their contributions as long as you do the same, and some may even match your contributions. It’s free money and it will benefit from compound interest, so it’s a good idea to check that you’re making the most of your workplace benefits!
If you’re self-employed, you generally won’t benefit from employer contributions but there are other ways to make sure your money is working harder for your retirement goals.
2. Find and combine your old pension pots 🔍
Did you know the average millennial changes jobs every 12 months1, meaning they could gain a new pension pot every year? With every new pot, old workplace pensions are usually forgotten about and left behind – in fact, there’s £26.6 billion sitting in old workplace pensions in the UK!2
Finding and combining your old workplace pensions into one easy-to-manage personal pension is a good way to get a head start on your retirement goals, without laying out a penny up front. With Moneybox, you can easily find your old pensions with just the details of your pension provider and pension policy number. Read more how you can find your pension details.
If you’re not sure where to start, our dedicated Pension Detectives can help track down your pensions in-app for free!
It’s well worth your time tracking down your old pots – you could be further along with your pension savings than you thought!
3. Boost your retirement savings with pension tax relief 📈
Pension tax relief makes contributing to a pension one of the most tax-efficient ways to save for retirement. That’s because, when you save into a pension you benefit from a 25% top up from the government (subject to personal circumstances) – it’s free money and is essentially what you would have paid in tax from your payslip. The great news is that we claim back basic rate tax relief for you – so all you have to do is sit back and watch your money grow like magic.
If you’re a higher-rate tax payer, you can claim the additional tax relief, but you’ll have to claim it yourself by completing a HMRC self-assessment. Learn more about pension tax relief.
Pension tax relief, together with employer contributions and compound interest, can help you get closer to your retirement goals – so make sure you take full advantage!
1 Pensions Age, Average millennial could have five different pensions
2 PPI, Briefing Note 134: Lost Pensions 2022: What’s the scale and impact?
Tax treatment depends on individual circumstances and is subject to change. As with all investing, the value of your pension can go up and down, and you may get back less than you invest. Payments you make into your pension won’t be accessible until the minimum pension age (currently 55 increasing to age 57 from 2028).
When deciding whether to transfer your pension, it’s important to compare the charges, investment options & benefits between Moneybox and your old provider. Moneybox cannot accept a transfer from a pension your employer is currently paying into.
If you’re not sure whether the Moneybox Pension is right for you, you may want to contact a suitably qualified financial adviser for help.