Whilst reading The Telegraph this weekend, I came across an article that talked about how employees of larger companies could be missing out on almost £2 billion every year by not getting the maximum pension contribution from their employer.
They estimate that 3.2 million people are losing out!
Yesterday I was helping a handful of employees from a TV station with their finances and only one of them was getting the maximum form their employer. Their work pension scheme is very generous; the employees’ pension contributions are doubled by the employer up to 4% i.e. if the employee pays in 4% then the employer will pay in 8%.
We also know that the average person in the UK is not paying enough into their pension. So here are my top tips to get on track:
- Make sure you get the maximum that you can out of your employer
- As a general rule of thumb, you need to pay in half your age as a percentage of your salary into a pension. So if you are 40, you need to pay 20% of your salary into a pension
- If you are paying into a personal pension too and you are a high (or higher rate) tax payer, make sure that you are declaring the pension contribution on your tax return. This will ensure that you get your tax relief back.
- Look at the investments inside your pension. If you are paying in the right amount, but the investments are not performing well then you will not meet your retirement goals. I use www.trustnet.com to get an initial feel of a client’s pension fund. If you are not sure what you are invested in, call up the pension provider and ask them for the fund name.
Lots of Love
Miss Lolly xxprevious post: Keeping it in the Family next post: Where Should You Keep Your Secret Stash