Why now is the time to increase your pension contributions

Dafferns Wealth

When you think ahead to your retirement years, you’ll have an image in mind of you taking it easy and enjoying hobbies, holidays and precious family time, free of any financial concerns.

But this doesn’t happen by itself.

Securing a comfortable retirement depends on sensible and disciplined financial planning, so you have the means to enjoy the lifestyle you desire in later life.

Of course, you will be eligible for the state pension, which is worth £203.85 a week, but that will barely be enough to cover most people’s expenses when they’ve retired.

It’s therefore vital that you spend this time saving into a private and workplace pension, and taking steps to maximise your income.

And one way to do that is to increase your pension savings if you can afford to do so.

Why you should step up your pension saving now

Benefit from compound interest
Time is an asset when it comes to pension saving, so it’s well worth increasing your contributions as soon as you can afford to do so, so your pension has longer to benefit from compound growth.

The earlier you start saving, the more time your pension pot has to grow.

Use your tax advantages
The UK government wants to incentivise pension saving and therefore offers generous tax relief on pension contributions. This means that a portion of what you contribute gets deducted from your taxable income, thereby lowering your tax bill.

Even small amounts can add up to large sums
When you’re making big financial decisions, it’s easy to think you have to deal with large numbers. But that’s not necessarily the case with pension saving, as just a slight increase in your contributions can make a big difference.

Even incremental increases of only a few pounds – the cost of a takeaway coffee, in other words – can lead to impressive results and help you secure your future.

What to do next
Review how much you’re currently contributing to both your workplace and personal pension. Ask yourself if you could realistically afford to increase your contributions by at least one per cent every month.

Once you’ve decided how much extra you want to save, set up a standing order so your increased contribution is automatically transferred to your pension.

Finally, if you want to go further in planning for retirement, and making sure your wider financial situation puts you on course to achieve your retirement goals, speak to a specialist in this field.

Our professional financial planners have extensive experience in helping people prepare for their future, and can look at your specific circumstances, needs and priorities to ensure you’re in the best possible position to enjoy the retirement you want.

Get in touch with us now and we’ll be happy to speak with you.