How to maximise your pension benefits

The benefit of having a good pension income is to fund an enjoyable active retirement. Talk to a pensions expert at Endeavour Financial Planning to learn how you can maximise the benefits of your pension.

Maximising pension benefits means creating a strategy that will achieve the optimum amount of retirement wealth.

State benefits

Of course every worker is entitled to the benefits of a state pension when they retire. However, if your state pension is the only form of income, then you probably will not be able to afford to keep up the lifestyle you are accustomed to. This is why it is important to have an additional retirement income.

The benefits of workplace pensions

All companies operating in the UK will have, or soon will have, a workplace pension scheme. These are basically long-term saving schemes with tax relief on contributions. The pension scheme invests all the contributions, and these investments grow the pension fund so that it can provide an income or a lump sum for retirement.

Members of a workplace pension scheme can access their funds after they reach the age of 55.

Contributions are based on a percentage of your salary, with the employee also contributing. Workplace pension schemes have a minimum contribution level, but many schemes are flexible so that employees can choose to pay more than the minimum amount in order to receive a higher retirement income.

As well as the benefits of the employer contribution, all contributions are tax free. The self-employed can take out a private pension and will also benefit from tax free contributions.

Investment portfolios

Many retired people live on the combined income of their state pension plus their workplace pension. To create additional wealth, an investment portfolio is a good idea.

You could leave your money in a high street bank or building society savings account, but interest rates may disappoint you. Alternative forms of saving could earn you more interest, although some investments are riskier than others.

Gilts, or government bonds, are low-risk investments but interest will not be much more than high street bank savings accounts. You can invest in individual companies that pay regular dividends and the value of the stocks may grow. This will likely create higher returns but with more risk.

You can invest in funds that buy stocks in various companies, often specializing in a particular industry or country. Funds can often achieve returns of around 5%, but are not risk free.

People aged between 18 and 39 can save in a Lifetime ISA. A maximum of £4,000 a year can be contributed, with the government adding an extra 25% each year. Funds can be accessed for your retirement.

Maximising pension benefits

To maximise your pension benefits, it is advisable to create retirement income by savings as much as you can in pensions schemes and investments.

For further advice, and to make a plan to maximise your retirement income, talk to Endeavour Financial Planning.

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation

The tax treatment is dependent on individual circumstances and may be subject to change in future

Posted by Mark
3rd August 2017


All blogs and news on Endeavour Financial Planning are for information purposes only and are not intended to provide advice. Please seek the advice of a financial advisor before making any financial decisions.


No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment