How to make your pension worth more – without paying more

It is a sad fact of life that money is rarely available for free.

This is a particularly true of your pension. This will probably require many years of steady contribution every month, coupled with careful investment aiming to build up the kind of cash lump sum you need.

But what if you are paying in all you can afford to your pension and are still looking at a final pension pot that is simply not large enough to fund the lifestyle you want?

All is not lost. At Continuum we are looking at ways to improve your pension pot without simply saving more into it.

Ensure your investments are working

How well are your pension investments performing? The difference between a high and low performing pension fund can be eye-watering. You need to ensure that your cash is invested with a good performing fund – and that it is invested prudently.

A good pension will offer a wide range of investment funds, across many different asset types and geographical areas to reduce risk as well as maximise returns.

Remember that you should review your pension investment choices regularly as you approach retirement. Security may start to become more important than capital growth.

Remember your forgotten pensions 

Most of us have several jobs in the course of our careers and job moves (together with house moves) can mean forgotten pension funds. In 2020 the Association of British Insurers estimated there was an astonishing £19.4 billion in lost or unclaimed pensions in the UK.

Tracking down lost pensions can be time consuming, so getting expert help can save you time and stress.

Look at drawdown

Before 2015 and pension freedom, there was really only one way to use a pension pot, which was to buy an annuity.

An income guaranteed for life sounds like a good idea, but the low rates on annuities in recent years make that idea much less appealing. Pension freedom rules provide some alternatives. They include being able to take up to 25% of your total pension savings tax-free at the age of 55 or over (rising to 57 from 2028), accessing your pension while continuing to work – or drawdown.

Drawdown lets you take payments from your pension pot as and when you need. It can offer better returns over the course of retirement as your money stays invested and can keep up and even exceed inflation. 

It means your pension pot can carry on working for you and potentially growing even after you have retired.

Get some expert help

At Continuum we can help you make the most of your pension pot, look at the ways to boost it if required and ensure that it works harder – even if you cannot afford to put in any more cash.

Fortunately, it is easy to get the help you need, right now. Simply contact us at Continuum.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable retirement strategy, you should seek independent financial advice before embarking on any course of action.

The value of investments can fall as well as rise and you may get back less than you invested.

Accessing pension benefits early can impact on the level of income in retirement and also may affect your entitlement to certain means tested benefits.

Accessing pension benefits early is not suitable for everyone. You should seek independent financial advice regarding your own personal circumstance before taking any course of action.

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