As bills continue to rise, many pension savers may be feeling the pressure as they can’t afford to contribute to their retirement the way they have before, however there are a number of things they could consider to boost this up.
Money expert Pete Mugleston, from onlinemoneyadvisor has suggested how pensioners can ensure they have enough in their savings as well as ways to make an additional income. He spoke exclusively with Express.co.uk on how people can get back on track saving for retirement.
Mr Mugleston said: “If you’re not on track with your retirement savings, or have a shortfall in your projected retirement income, fortunately there are a number of ways you can increase your pension savings and boost your pension in the run-up to retirement.
“When you’ve worked out how much extra you’ll need to contribute to your pensions savings each month to fill your retirement income gap, you have several options.”
Firstly he suggested people joining their workplace pension scheme.
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A percentage of someone’s pay is put into the pension scheme automatically every payday.
In most cases, their employer also adds money into the pension scheme for them. People may also get tax relief from the government as an extra incentive
He continued: “If you’re still employed, make sure to join your employer’s workplace pension scheme; this is a sure-fire way to bolster your retirement income instantly as all employers must now offer eligible employees a workplace pension and make contributions to it.
“If you’re already a member of a workplace scheme, try boosting your contributions as this’ll likely be the most convenient option for you – many employers match the contributions their employees pay, usually up to a certain amount, so if you pay more, they’ll also pay more.
This works out as just under 5.8 percent for every 52 weeks. The extra amount is paid with one’s regular state pension payment.
Mr Mugleston said: “Aside from this, to boost your pension income in the run-up to retirement, you can either save more by adding to an existing scheme or simply delay the date you’ll start taking your retirement income.
“Delaying taking income from your pension could subsequently boost it as well, mainly because you’re giving yourself more time to contribute to your pension pot and allowing more time for it to potentially grow and earn interest.
“Also, rates for guaranteed income products tend to increase as you get older, so delaying might mean you’ll eventually get a higher income (providing annuity rates don’t fall).
“However, before even thinking about delaying your pension, be sure to speak to an independent financial advisor first to understand your options and check whether you’ll incur any charges for changing your retirement date.”
Lastly, he recommended downsizing as a possible option to get ahead with retirement savings.
Downsizing is the process of moving into a smaller property. People might be considering taking this step for a variety of reasons – it could be to boost their finances, reduce their expenses, help them pay for care, or to move into a more suitable home or a better location.
Mr Mugleston said: “Downsizing is another possible way to fund retirement, but this is entirely dependent on your current living situation. If you live in a large house and would prefer to move to a smaller property when you retire, you could make a significant profit by selling up and buying elsewhere.
“However, relying on downsizing for your retirement income alone comes with serious risks that you’ll need to consider. For instance, the property market can be unpredictable, and you might not get as much money for your home as you initially expected.
“You’ll also need to take into account all the other costs associated with moving, including legal fees, solicitor fees and much more, as you might find that downsizing isn’t the lucrative financial venture you’d first hoped. To give yourself more flexibility at retirement, you’ll need a decent pension alongside your property.”