Little-known tax tip to boost pensions by £3,600 per year | Personal Finance | Finance
It can be stressful to think about your pension (Image: Getty Images)
If you want to boost your pension by £3,600 a year, there’s one easy way you can do it. You might be thinking about retirement, or you may already be claiming your pension. Making sure you maximise your pension is crucial to being able to enjoy your retirement.
Experts at Hargreaves Lansdown say making the most of your loved one’s allowances is important. If you have used up your own allowances, then you can contribute to the SIPP of a loved one to give their retirement a much-needed boost.
Enjoying retirement can feel difficult if you are worried about your finances (Image: Getty Images)
Read more: Boost your pension this year ‘by maximising allowances’
Read more: Thousands of pensioners missing out on £4,300 boost from DWP
You can contribute up to £2,880 per year to the SIPP of a non-working spouse or child, and they will receive a government top-up in the form of tax relief, bringing the contribution to £3,600.
It can really help a spouse or civil partner fill gaps in their pension planning, and you can get your child’s retirement planning off to a flying start by contributing to a Junior SIPP, the experts say.
Even small contributions can grow over time and put them thousands of pounds ahead of their peers by the time they start work.
Not only this, but it is also crucial to make sure you find those lost pensions.
It’s easy to lose track of pensions from old employers, but this can leave you thousands of pounds worse off in retirement.
If you think a pension has gone astray, then contact the government’s Pension Tracing Service.
Boosting your pension can be easier than you might think (Image: Getty Images)
You will need either the name of your employer or pension provider, and they will give you contact details so you can get in touch to see if you have a pension with them.
Once you’ve gathered your pensions together, it might make sense to consolidate them. This could save you time, money and admin.
However, before you do, make sure you aren’t incurring any exit fees or missing out on benefits such as guaranteed annuity rates.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, says: “Retirement may feel like it’s a long way away but the quicker you get to grips with it the better.
“Auto-enrolment has been a gamechanger in making sure more people than ever are saving into a pension, but taking a set and forget approach to contributions could see you with less than you expected.
“The latest data from HL’s Savings and Resilience Barometer shows that only 43% of households are on track for an adequate retirement.
“Taking some simple actions now can make sure you navigate some key pension pitfalls that can make a huge difference for your retirement.”
