If you have a defined contribution pension, here are six simple things you can try:. Start off by paying in whatever you can afford, then whenever you get a pay rise, redirect a portion of it into your pension.
You can try a similar move to the one above whenever a regular expenditure comes to an end. If you pay off a car loan, for instance, you could pay the extra money into your pension plan.
Even small increases like this can make a big difference — especially over the long term. Some employers increase the amount they pay in when you increase your contributions too up to a certain limit. So if you put in an extra percent or two of your salary, they might pay in more as well. Ask your boss for details of whether they contribute to your pension plan, and by how much. If you come into some cash, paying a lump sum into your pension is a quick and easy way to give it a boost. And as with other payments into your plan, the government will top it up with tax relief up to a certain limits.
Your tax treatment depends on your individual circumstances and may be subject to change. The longer you leave your pension untouched, the longer it has to potentially grow.
Investments can fall as well as rise in value, and you may not get back what you paid in. For example, if your scheme has a 'default' investment option -- where your money is automatically invested when you join the scheme -- it may not be the most suitable for you.
Exactly how you make changes to your pension will vary depending on which type you have. However, with many modern schemes you can make alterations online with just a few mouse clicks. This article is not intended to give advice or a personal recommendation.
If you'd like a personalised recommendation based on your circumstances, you should seek financial advice.
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