Find out where you are

First of all, figure out what you have currently got as without this information you’ll never know whether you are on track to a secure retirement or not.  Many of us have “bits and pieces” of pensions from previous employers but lose track of their values. In particular, if you have an old final salary scheme, this might be a lot more valuable than you think. A deferred pension of one or two thousand pounds a year at retirement might not sound like much but you would need a five figure sum in a pension to generate that sort of income.

Claim your tax relief

Tax relief on pensions is complicated. We sometimes find that new clients who are 40% or 50% taxpayers haven’t been claiming their tax relief properly and are owed a tax refund from HMRC. If you pay in via your employer, check with your HR team whether you get all of your tax relief via payroll or not.

Make the most out of employer schemes

Many people unwittingly turn down the opportunity for free money from their employer by not joining their pension scheme. Not all employers offer pension schemes but those that do generally pay into them and will often pay in a bit more if you commit to it too. For example, an employer may make a standard contribution of 6% of salary but if you pay a further 3% they will match this with an additional 3%. Take your time to familiarise yourself with this. If in doubt ask a colleague or seek independent financial advice. Don’t miss out on a free pay rise.

Make the most out of tax relief

We all know that pensions can be a bit dull but short of a trip to Las Vegas, where else can you double your money overnight? A 50% taxpayer has a choice. Do I want £10,000 in my pension or £5,000 in my pocket? In fact, anyone earning over £42,475 p.a. can get a really attractive tax break. Yes, pensions come with a few strings attached, primarily the money being tied up until at least 55 but they really should be treated as your friend not your foe.

Review your old schemes

Have a look a fund choice and charges, If your current employer’s scheme is lower cost and offers comparable fund choice, consider transferring old schemes into it to reduce costs and personal administration. However, make sure you wouldn’t be giving up any guaranteed annuity rates or guaranteed growth rates on the old scheme and also check whether there are any transfer penalties.