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How to get the Most out of your Pension Plan


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November 16, 2022

We all work hard to build our pension savings and give ourselves some peace of mind for retirement but how often do we take time to ask ourselves 'is our pension working for us?'

If you have several pensions with different providers, maybe it would benefit you to bring your pensions together. If you aren't on track to have the income you expected in retirement perhaps it would be a good time to review the funds your pension is invested in and make some changes. If you have received some unexpected income and aren't quite sure how to spend it maybe your pension could benefit from a mini cash injection.

Understanding and reviewing our pension savings is something we should be doing much more regularly. Pension plans need some TLC and taking time to consider how to get the most out of your pension plan can make managing your pension savings easier and ensure your retirement nest egg is in the best position possible for when you need it.

Follow these tips to consider if your pension could do with a revamp:

Take stock of what you have in your pension/pensions

Many of us have several jobs during our careers and this can often mean that we have several pensions with different providers scattered about. When reviewing your pensions, it is imperative you look at all your pensions (including any former work pensions or individual pensions) to be able to see exactly how much you have in pension savings so you can make accurate projections for your retirement.

When you review the benefits of each pension you might find that it would be beneficial for you to consolidate your pensions into one pot. There can also be cash incentives, vouchers or reduced interest rates if you shop around for the best provider bringing you perks in both the short and long term.

Maximizing pension savings

The introduction of auto-enrolment in the last 10 years has meant that most of us who are currently working will have at least one group pension that both ourselves and our employer pays into. A great way to maximise pension savings is to increase our workplace pension contributions for as little as 1% which would make a considerable difference over time. It may also be that your work scheme rules mean that if you increase your contributions your employer will also, so this is always worth looking into.

One of the most tax-efficient ways of investing money is to pay it into a pension as a lump sum and for many people, particularly those approaching retirement age, giving their pension savings a boost with funds they weren't expecting can alleviate the stress they may feel about the size of their retirement pot.

Review pension pot investments

Pensions are invested in funds that are often low risk. Therefore, whilst the amount you invest is unlikely to decrease rapidly if there is a dip in the stock market it also means that it will also not make large gains.

If your pension type permits you to change the funds your pension savings are invested in it may be worth researching the funds available to invest in that could allow you a potentially larger return.


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About the author

Emily Taylor

Emily Taylor is an experienced and impassioned writer with 6+ years experience in sharing her knowledge of finance both personal and business.

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