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Five ways to make the most of your retirement

Date: 19 September 2023

3 minute read

We asked an expert what you should consider to help you make the most of your hard-earned money and enjoy the retirement you deserve.

Rosie Hooper, financial planner at Quilter says:

“I believe planning for your retirement and saving sufficiently into a pension is vital as it helps you have enough money to live a comfortable lifestyle once you have stopped working. Having no plan in place is one of the biggest mistakes you could make.

“While auto-enrolment has arguably had a positive impact on uptake of pensions and retirement savings, many people are still struggling to get to grips with planning their finances for later life.

1. Don’t rely solely on the State Pension

“When considering your future finances, it is important not to rely solely on the State Pension. Even if you are eligible to receive the full State Pension, which will be £185.15 per week for the 2022/23 tax year, it may not be sufficient to support the retirement lifestyle you desire; if that’s the case, then you’ll need additional funds to supplement it.

“If you are not currently eligible for the full State Pension, you may be eligible to make voluntary National Insurance contributions to fill in any gaps in your NI record.

2. Opt back in

“Employers are legally required to provide a pension for their employees and to make payments into them. Employees automatically join the pension scheme (a process called ‘auto-enrolment’) unless they opt out.

“If you have previously chosen to opt out of auto-enrolment, it would be wise to reconsider as you are likely missing out on valuable retirement benefits including generous employer contributions and tax relief.

“You could also miss out on other important benefits which may vary from scheme to scheme, but could include a pay out from your pension scheme if you were to fall ill and become unable to work prior to your retirement date, or benefits the scheme would pay to your dependents if you were to pass away unexpectedly.

3. Don’t delay saving

“Some people consider saving from a young age to be unnecessary, but it is in fact one of the most important times to be contributing as that money will have a longer chance to grow.

“Quilter’s data show that someone making a £100 a month contribution to their pension starting at the age of 40 would accumulate a pot of just over £24,000 by the age of 55, assuming the pot grows by 5% per year. In comparison, if you did the same from age 25, you would save over £68,500. In this specific example, an extra 15 years of saving can nearly triple the pension pot, and demonstrates that delaying saving could have a substantial impact on your financial stability in retirement. 

“If you have left saving for retirement until later in life, you may wish to consider making a start. While the pot may not be able to grow as much as you would have liked, some savings are still better than none. You can also consider working for longer to boost your contributions to your pension pot.

4. Be aware of how your pension is invested to achieve the best possible returns

“Many people are unaware of how their pensions are invested and while it may be easy to remain in the default fund, performance can vary substantially across different investments. Even a small difference could significantly increase the size of your pension pot so it is a good idea to make sure you understand where your money is invested to ensure it is in the right fund for you. It is important to remember that the value of investments can go down as well as up.

5. Speak to an expert

“If possible, you should seek financial advice to ensure you are making the best possible decisions for your personal circumstances and retirement plans. A financial adviser will be able to support your decision making and help find the best solutions for you based on your personal preferences.”

A good place to start is the free Government backed service, MoneyHelper, which can help you understand what your overall financial situation will be when you retire.