You should aim to maximize the guaranteed income you have available to you in order to maximize your retirement. Here are 4 ways to increase your pension check.
Those with pensions know how valuable they are. Therefore, if you’re among the fortunate few who have a pension, you’ve undoubtedly wondered how to get your pension check increased. Alternatively, more broadly speaking, how can you increase your guaranteed monthly income by the time you retire? In this piece, I outline four ways to boost your pension.
Are you worried about having enough money in retirement? Many people are, and with good reason. The cost of living is rising, and the State Pension may not be enough to cover your needs. Fortunately, there are several things you can do to boost your pension savings and ensure a comfortable retirement.
This guide will provide you with all the information you need to increase your pension savings, including:
- How much you need to save
- Your main options for boosting your savings
- How to get the most out of your State Pension
- How to find lost pensions
- Where to get more information and advice
How Much Do You Need to Save?
The amount you need to save for retirement depends on several factors, including your desired lifestyle, life expectancy, and current savings. However, a good rule of thumb is to aim to save at least 10% of your income each year.
You can use our Pension Calculator to get a personalized estimate of how much you need to save.
Your Main Options
There are several ways to increase your pension savings. Here are some of the most common:
- Join your employer’s workplace pension scheme. This is the best way to boost your savings, as employers are required to contribute to your pension pot.
- Increase your contributions to your existing pension scheme. If you’re already a member of a workplace pension scheme, you can increase your contributions to boost your savings.
- Set up your own personal pension plan. If you’re self-employed or don’t qualify for a workplace pension scheme, you can set up your own personal pension plan.
- Make additional contributions to your State Pension. If you have gaps in your National Insurance record, you can make Voluntary National Insurance Contributions to increase your State Pension entitlement.
The State Pension
The State Pension is a government-funded pension that you’re entitled to if you’ve paid National Insurance contributions for a certain number of years. The full new State Pension for 2024/25 is £221.20 per week. However, the amount you receive will depend on your National Insurance record.
You can get a State Pension forecast to see how much your entitlement will be.
Pension Tracing
If you’ve changed jobs several times over the years, you might have lost track of some of your old pensions. You can use the Pension Tracing Service to find them.
Where to Get More Information and Advice
If you need more help with your pension savings, you can speak to a regulated financial advisor. They will go through your options and help you choose the best one for you.
You can also find more information and advice on the MoneyHelper website.
Boosting your pension savings is one of the best things you can do to secure your financial future. By following the tips in this guide, you can increase your savings and ensure a comfortable retirement.
Frequently Asked Questions
Q: How much do I need to save for retirement?
A: The amount you need to save for retirement depends on several factors, including your desired lifestyle, life expectancy, and current savings. However, a good rule of thumb is to aim to save at least 10% of your income each year.
Q: What are my main options for boosting my pension savings?
A: Your main options for boosting your pension savings include joining your employer’s workplace pension scheme, increasing your contributions to your existing pension scheme, setting up your own personal pension plan, and making additional contributions to your State Pension.
Q: How can I get the most out of my State Pension?
A: You can get the most out of your State Pension by making sure you have a complete National Insurance record. You can also make Voluntary National Insurance Contributions if you have gaps in your record.
Q: How can I find lost pensions?
A: You can use the Pension Tracing Service to find lost pensions.
Q: Where can I get more information and advice?
A: You can find more information and advice on the MoneyHelper website. You can also speak to a regulated financial advisor.
Increase Your Pension Tip 1: Know and Leverage Your Pension Formula
Three factors are included in the formula used to calculate most pension benefits:
- The number of years you worked at the company,
- What your pay was during your employment, particularly in the last stages, and
- A benefit multiplier.
You typically won’t be able to do anything about #3, but you can surely work on #1 and #2. Most pension plans will have tools that you can apply to your particular situation, allowing you to increase your pension check as much as possible. How will working longer or more hours affect the benefit you’ll receive? Can you increase your salary through a promotion or raise that will then translate to a larger pension? If you haven’t already set up these tools, get in touch with your HR department.
Increase Your Pension Tip 2: Lobby Your Employer
Admittedly, this can be an uphill battle, but it’s not impossible. With more employers using the recent tax break to boost 401(k) matching contributions, there’s no reason similar uptick couldn’t be made to your pension.