As bills continue to rise, many savers may be feeling the pressure as they cannot afford to contribute to their retirement as they once did, but there are a number of things they could consider to increase that.
Money expert Pete Mugleston of onlinemoneyadvisor suggested how retirees can ensure they have enough savings as well as ways to earn extra income. He spoke exclusively to Express.co.uk about how people can get back on track by saving for retirement.
Mr Mugleston said: ‘If you are not on track with your retirement savings or have a shortfall in your expected retirement income, fortunately there are several ways to increase your retirement savings. and increase your pension as you approach retirement.
“Once you’ve figured out how much more you’ll need to contribute to your retirement savings each month to close your retirement income gap, you have several options.
First, he suggested people join their occupational pension plan.
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A percentage of someone’s salary is automatically paid into the pension plan each payday.
In most cases, their employer also adds money to the retirement plan for them. People can also get tax relief from the government as an added incentive
He continued, “If you’re still employed, make sure you join your employer’s pension plan; This is a surefire way to instantly boost your retirement income, as all employers must now provide eligible employees with an employer pension and contribute to it.
“If you are already a member of a company scheme, try increasing your contributions as this will probably be the most practical option for you – many employers match the contributions their employees pay, usually up to a certain amount. amount, so if you pay more, they will also pay more.
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This equates to just under 5.8% every 52 weeks. The additional amount is paid together with the regular state pension payment.
Mr Mugleston said: ‘Apart from this, to increase your retirement income as you approach retirement, you can either save more by supplementing an existing scheme or simply delay the date you start to receive your income. of retirement.
“Delaying your pension income take-up could also increase it down the road, primarily because you’re giving yourself more time to contribute to your retirement pool and giving it more time to potentially grow and generate interests.
“Also, guaranteed income product rates tend to go up as you get older, so delaying could mean you’ll get a higher income eventually (provided annuity rates don’t drop).
“However, before you even think about delaying your retirement, be sure to speak with an independent financial adviser first to understand your options and check whether you will incur any costs for changing your retirement date.”
Finally, he recommended downsizing as a possible option for moving forward with retirement savings.
Downsizing is the process of moving to a smaller property. People might consider taking this step for a variety of reasons – it could be to increase their finances, reduce expenses, help pay for care, or to move into a more suitable home or better location.
Mr Mugleston said: “Downsizing is another possible way to fund retirement, but it depends entirely on your current living situation. If you live in a large house and prefer to move to a smaller property when you retire, you could make a significant profit by selling and buying elsewhere.
“However, relying solely on downsizing for your retirement income carries serious risks that you will need to consider. For example, the real estate market can be unpredictable and you might not get as much money for your home as you originally expected.
“You will also need to consider all other costs associated with the move, including legal fees, attorney fees and more, as you may find that downsizing is not the lucrative financial business you you originally hoped. To give you more flexibility in retirement, you’ll need a decent pension alongside your property.