It is possible to get to over £1,000,000 in your pension pot, the key thing is to start early and spend time in the markets rather than trying to time them.
Here are some ways you can enhance your pension for a comfortable retirement:
Don’t Dip In
You can take 25% of your pension in a lump sum tax free when you’re 55. It makes sense not to utilise this and leave the money there until retirement but of course this is easier said than done.
Watch Your Lifetime Allowance
Your lifetime allowance is £1,073,100 until 2026 when it will likely reduce. This is the amount you can save without tax. There are options to mitigate when you go over this amount.
Invest Lump Sums
You can carry forward £40,000 in unused per annum allowances of 3 years if you haven’t already. A lump sum investment utilising this tax advantage can significantly enhance your pension especially with compound interest in the equation too.
Employer Contributions
Employers will pay the least amount required as a rule but it doesn’t hurt to ask the question for them to contribute more and take advantage. The minimum is 3% but they may contribute more.
Increase Your Contributions
Try and up your monthly payments when you can. Have a plan to increase by 5% per year as you earn more. This will soon add up over time and increase your pension pot.
Don’t Delay
There’s always an excuse to put savings off as life is so busy with so many demands. Getting started even if it’s a small amount can make a big difference to to financial future through taking the first step.
To find out more about how you optimise your pension for a comfortable retirement, talk to one of our FCA authorised wealth managers by arranging a Discovery Call [Here]
This article is for informational purpose only. It does not constitute finacial, tax or legal advice, nor is it a recommendation to buy, sell or hold any investment. Past performance is not a guide to the future, investments rise and fall so investors could make a loss. No view is given on the present, future value or price of any investment and investors should form their own view on any proposed investment.