Five ways to painlessly plump up your pension

1. Don’t pass up free money 

Increase your workplace pension contributions or you could miss out on what is essentially free money from your employer, as they will add to your pension fund on your behalf. 

Afterall, you wouldn’t turn down a Christmas bonus, so don’t pass up free pension cash from work. 

Under auto enrolment, employers are required to put a minimum of 3% of your earnings between £6,240 and £50,270 into your pension.  

Tax relief from the Government provides another 1%. 

You must put in at least 4% on your own behalf, and if you opt out all the above is lost. 

Extra top-ups are frequently available, particularly from large employers. 

For example, an employer might automatically match 3% of your earnings as its minimum contribution to your pension already. 

But it might be willing to make 4%, 5% or 6% in matching contributions if you opt to save a higher proportion of your income. 

You wouldn’t turn down a Christmas bonus, so don’t pass up free pension cash from work. 

2. Go hands free with your savings 

Some current accounts offer to round up your spending to siphon off cash for your savings pot. 

For instance, Starling offers Round Ups, which does what it says on the tin - rounds up your spending to the nearest pound and adds the spare change into a savings space of choice.  

For example: if you spend £14.50 on a train ticket and it will round it up to £15, and the extra 50p goes into savings.  

To reach your savings goals even faster, try multiplying the spare change you save – increase to x2, x5 or x10 in your app. 

If you're interested in switching banks or opening up a new current account, you can compare current accounts with MoneySuperMarket.

3. Make it automatic 

Set up a direct debit to transfer your savings from your current account top-ups to your personal pension fund each month – you will be surprised how quickly it will add up. 

Many people say they can’t save because they don’t have any cash left at the end of the month – so have your extra cash go out on payday. 

It means the money is out of your account before you’re aware of it and you have to live on what’s left over.  

After a while, you hardly notice the difference – but your pension pot will. 

Bear in mind that under HM Revenue & Customs (HMRC) rules there’s a limit on the total amount you can save each tax year into all registered pension schemes and the tax relief you receive on your contributions.  

The annual allowance limit for the current tax year is £60,000. This limit includes all your contributions, tax relief and employer contributions across all your pension arrangements. If you go over this limit, this will result in a tax charge, known as the annual allowance charge.  

You can find out more about your annual pensions allowance on the MoneyHelper website.

4. Combine existing pensions to reduce fees

Pensions can seem confusing or time-consuming, so they often end up at the bottom of our life admin list.  

If you have existing pensions - most of us may have more than one - you may struggle to keep track of them, especially after changing jobs a few times and having multiple, small workplace pensions. 

Sadly, these pensions can end up stuck in underperforming funds with high fees, and those who decide to self-manage can make expensive mistakes. 

If this sounds like you, it could be worth combining your old pensions into one new plan so that you can take control of your investments and the fees you’re paying. 

Comparing pension plans with our partners Profile Pensions is easy. The service is hassle-free, easy to use, and puts you in control of your pensions at all times.   

You will have your own dedicated Pension Adviser to help you, they will help you choose the best investment plan for your circumstances, selecting funds from the whole of the market. 

When using the Profile Pensions Find, Check & Transfer service, a one-off arrangement fee of 1% of the pension value is charged when you transfer.  

All pensions found using this service will also be checked for any existing benefits or penalties.   

5. Find lost pensions 

Around 2.8 million Britons have lost a pension with worth an average £9,500, according to research by the Pensions Policy Institute (PPI). 

For those aged between 55 to 75, the average lost pension pot was found to be £16,004. 

If you’ve lost an old pension and need help finding it, Profile Pensions Find, Check & Transfer service can help you find your lost money and combine it with other pension pots you may have. 

  

Capital at risk. Past performance is not a guide to future performance. This website does not constitute personal advice. If you are in doubt as to the suitability of an investment, please speak to a financial adviser. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change.   

MONY Group Plc an Introducer Appointed Representative of Profile Pensions, a trading name of Profile Financial Solutions Limited which is authorised and regulated by the Financial Conduct Authority. FCA number 596398. Registered in England & Wales, Company Number 07731925. Registered office address: Norwest Court, Guildhall Street, Preston, PR1 3NU.