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 xx