If retirement isn’t far away, there are steps you can take that will help increase your retirement income and boost your pension. This applies to both the State Pension retirement and any personal or workplace pension you have set up.
Two Key Options
There are two main options that will help boost your pension; delaying the date you start taking the retirement income and topping up your pension pot, whether by adding to the existing scheme or starting an additional one.
Increase Workplace or Personal Pension Contributions
Adding into your pension contributions in the years running up to your retirement will bring an immediate boost in the form of tax relief. However, there is a limit on the contributions you can pay into pensions that qualify for tax relief. Be sure to check before increasing contributions, make sure your provider can give you good investment on the money you contribute.
Delay Workplace or Personal Pension
Delaying when you start taking your retirement income could boost your pension in a couple of ways. It allows more time for you to contribute to your pension pot and thus for it to grow, so you have more savings by the time you retire. Annuity rates also increase as you grow older, so by delaying you could end up receiving a higher income. If you are thinking of delaying taking your pension, check with your provider first if charges will be made.
Add Lump Sums
If you come by a decent amount of money, such as getting a win on the lottery, you can add this straight to your pension pot. Adding larger amounts will have good interest and investments rates, so by the time you retire the amount paid in could have doubled in worth.
If you have several pension pots with different providers, it may be a good idea to combine into one pot. This makes it easier to keep track of your savings and estimated income at retirement. You could also reduce the charges by moving into a pot with a provider who charges less. However, before starting any transfers, check the type of pension you have, so you will not lose any benefits or schemes.
Generate Income Elsewhere
If you find your pension income falls short, you can find ways to generate income in other ways, such as part-time work, renting out a room, making money from a hobby or downsizing your home. Of course, there are pros and cons to all these, and consider the tax implications of extra income, but this could allow you to ease into retirement more comfortably.
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