Women have a lot more trouble staying on track with their pension savings than men, for a number of reasons…
They are generally the ones who either reduce working hours or stay at home to bring up the children, and they also tend to earn less than their male counterparts.
Both of these facts make it difficult for women to keep their pensions on track so they can enjoy the retirement they deserve, but there are a number of things you can do to make sure your retirement fund is growing as you expect.
- Start early – the earlier you start saving for your pension, the bigger the pension pot should be when you reach retirement age, and the less impact a few years out of work is likely to have. However, if you are reading this thinking it is probably too late for you to do anything about your retirement planning, think again – doing something at any stage will always be better than doing nothing.
- Make the most of your tax breaks – if you have a personal pension, which would include some pensions set up by employers that are known as group personal pensions, then check you are getting all of the tax relief you are due. If you are a 20% taxpayer, your tax rebate on pension contributions is made automatically. But if you are a 40% or 45% taxpayer, then you may need to reclaim the additional 20% or 25% tax relief yourself through your tax return. Check whether your company is doing this for you, and make sure you claim it yourself if not.
- Get your spouse or civil partner to pay money into a stakeholder pension – any of you, including children, can put up to £3,600 a year including tax relief into a stakeholder pension. If your spouse or civil partner earns enough to be able to put this money away for you while you are bringing up the family, it would be a sensible thing to do. The only caveat is that, currently, you can only put a maximum of £40,000 into all pensions you have in a tax year and get tax relief. You cannot receive more tax relief than you pay in tax in a single year.
- Get regular pension updates – If you think pensions are boring, how interesting do you think a life in penury will be? Make sure you get regular updates on your pension’s performance, and make changes to the underlying investments by taking advice if you need to.
- Cut the cost of charges – pension providers take money out of your pension for management fees, and this can hit the fund value hard. Make sure you know what you are being charged, and get a pension review to see if you can find a better deal elsewhere. The rewards at retirement could run into tens of thousands of pounds.
Profile Financial will offer you a free pension review which compares all of the pension products on the market so you can find out whether you can get a better deal than you have right now. Just call 01772 977426 or visit www.profilefinancial.co.uk
