The State Pension is not a lot of money. At just £168.60 per week currently, it’s unlikely to provide a comfortable standard of living in retirement. However, if you’re concerned about the low payout, there are plenty of things you can do in the lead up to retirement that could reduce your reliance on state-funded money and boost your chances of living a comfortable lifestyle in your later years.
Here’s a look at three things I’d suggest doing if you’re worried about living off the State Pension.
Check workplace pensions
The first thing I’d do is work out how much money I have sitting in workplace pensions.
Today, Automatic Enrolment means that it’s now compulsory for workers to be enrolled in their employer’s workplace pension scheme and for the employer to contribute towards the scheme, so the chances are you have some money in a workplace pension if you’re still working. You may also have pensions from past jobs. So, it’s worth finding out how much your pensions are worth and looking into how much you could potentially receive from these in retirement. They could boost your pension income by quite a bit.
If you’re still working, it could also be worth speaking to your employer about whether they will match ‘top up’ contributions. Many employers are quite generous in this regard and are willing to pay a little bit extra into your pension if you make extra top-ups. This could help you build up your pension balance quite quickly, so it’s definitely worth looking into.
Save into a SIPP
Another thing I’d do to boost my retirement savings is open up my own personal SIPP (Self Invested Personal Pension) retirement account and begin saving into this.
The beauty of the SIPP is that it comes with tax relief, which basically just means bonus money on contributions. If you’re a basic rate taxpayer, the government will offer you 20% tax relief on your contributions, meaning an £800 contribution becomes £1,000. By saving into a SIPP regularly in the lead up to retirement, you could build up a nice little pension pot.
Invest my money
Finally, if I was worried about the State Pension, I’d also want to make sure that my money was working for me in the lead up to retirement and growing at a healthy rate. So, I’d look to deploy my money into a mix of assets designed to achieve a solid level of growth.
Instead of just keeping my savings in cash, I’d invest in a mix of shares and funds, with the goal of generating a return of 6% to 10% per year. This could help me grow my money significantly in the lead up to retirement, meaning less dependence on the state.
The State Pension does sound a little scary, however there are plenty of things you can do before retirement to build up your savings. If you’re looking to learn more about how to grow your money in the lead up to the end of your working life, you’ve come to the right place.
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