5 Ways to Give Your Pension Savings a Boost in the UK
As autumn sets in, it’s the perfect time for a financial health check. Your pension is arguably the most powerful tool you have for building long-term wealth, but for many, it runs on autopilot. While "set and forget" is better than not saving at all, taking a few proactive steps can dramatically increase the size of your final pot, potentially adding tens or even hundreds of thousands of pounds to your retirement fund.
The difference between a modest retirement and a comfortable one often comes down to a few smart decisions made along the way. At Plouta, our mission is to empower you with the knowledge to make those decisions. As a financial adviser, these are the five most impactful tips I share with my clients to help them supercharge their pension savings.
What You’ll Learn in This Guide:
The "Free Money" Audit: How to ensure you’re getting every penny from your employer.
The Pension Treasure Hunt: Finding and consolidating lost pots to cut costs.
The Investment Health Check: Making sure your money is working hard enough.
The Tax-Relief Power-Up: A crucial tip for higher earners.
The State Pension MOT: How to optimise your guaranteed income foundation.
Tip 1: The "Free Money" Audit – Max out Your Employer Match
This is the single most important and easiest win for any employee. It is non-negotiable.
What it is: Most employers who offer a workplace pension will "match" your contributions up to a certain percentage. For example, they might contribute 3% as long as you contribute 5%, but offer to increase their contribution to 6% if you also increase yours to 6%.
Why it's crucial: Not contributing enough to get the full employer match is like turning down a guaranteed 100% return on your money and, effectively, a pay rise. It is the best investment you will ever make.
The Reality Check: A surprising number of people only contribute the minimum required for auto-enrolment, often leaving valuable employer-matched money on the table.
Your Action Plan:
Check Your Policy: Log in to your workplace pension portal or ask your HR department: "What is the maximum amount my employer will match?"
Increase Your Contribution: If you are not contributing enough to get the full match, increase your contribution rate today. This is your number one priority.
Tip 2: The Pension Treasure Hunt – Trace and Consolidate Old Pots
Over an average career, you might have half a dozen jobs, each with a different pension pot. These scattered, forgotten pots are often languishing in high-fee schemes or overly cautious funds.
What it is: The process of finding all your old workplace pensions and considering whether to consolidate them into a single, modern plan (like a SIPP - Self-Invested Personal Pension).
Why it's crucial:
Cut Charges: Older pension schemes often have much higher annual charges (sometimes 1.5%+) than modern plans (which can be under 0.5%). This fee difference can save you tens of thousands of pounds over the long term.
Better Investment Choice: Consolidating into a SIPP gives you far more control and a wider choice of investments.
Clarity: Seeing your entire retirement savings in one place makes it much easier to track your progress and plan effectively.
Your Action Plan:
Make a List: Write down all your previous employers.
Trace: Use the government's free Pension Tracing Service to find the contact details for each scheme.
Analyse: Get an up-to-date statement for each pot. Pay close attention to the annual charges, the fund performance, and any special features.
Consider Consolidating: Speak to a financial adviser or use a reputable provider to transfer your old pots into a single, low-cost SIPP. Crucial warning: Before transferring, always check you are not giving up valuable guarantees, like a Guaranteed Annuity Rate (GAR), on older policies.
Tip 3: The Investment Health Check – Are You Taking Enough Risk?
When you're automatically enrolled, your money is placed in a "default" fund. These are designed to be a safe one-size-fits-all, but that might not be right for you.
What it is: Reviewing where your pension is actually invested.
Why it's crucial: If you are in your 30s or 40s with decades until retirement, your money needs to be invested for growth. Many default funds can be overly cautious. By switching to a fund with a higher allocation to global equities (shares), you give your money the potential to achieve significantly higher long-term returns.
The Reality Check: A 2% difference in annual returns over 30 years can have a monumental impact on your final pot size due to compounding.
Your Action Plan:
Log In: Access your pension provider's online portal.
Find Your Fund: Look for the section on "Investments" to see which fund you are in.
Review the Options: Your provider will offer a range of other funds, usually categorised by risk (e.g., "Cautious," "Balanced," "Adventurous," "Global Equities"). Read the factsheets and consider if a higher-growth fund is more appropriate for your long-term goals.
Tip 4: The Tax-Relief Power-Up – A Must for Higher Earners
Pensions are brilliant for everyone, but they are a super-powered tool for higher and additional-rate taxpayers.
What it is: Making pension contributions to claim back 40% or 45% tax relief.
Why it's crucial: If you are a 40% taxpayer, every £100 that lands in your pension only costs you £60 from your take-home pay. This is an immediate 66% boost from the government. Many higher earners fail to claim the full relief they are due.
Your Action Plan:
Claim Your Relief: Your pension provider claims 20% relief automatically. You must claim the additional 20% or 25% yourself via a Self Assessment tax return. If you don't file a tax return, you can call or write to HMRC to have your tax code adjusted.
Use "Carry Forward" for Bonuses: If you receive a bonus, contributing it to your pension is incredibly efficient. You may be able to use any unused Annual Allowance from the previous three tax years to contribute more than the standard £60,000 allowance in one go, saving a huge amount in income tax and NI.
Tip 5: The State Pension MOT – Don't Neglect Your Foundation
Your State Pension provides a guaranteed, inflation-proofed income for life. Maximising it is a key part of any retirement plan.
What it is: Reviewing your National Insurance (NI) record to ensure you're on track for the full State Pension.
Why it's crucial: You typically need 35 qualifying years on your NI record to get the full amount (currently over £11,500 a year). Each missing year can reduce your entitlement.
Your Action Plan:
Get Your Forecast: Go to the GOV.UK website and get your State Pension forecast now.
Check for Gaps: The forecast will show your full NI history. Look for any years that are not "full."
Consider Voluntary Contributions: You can often "buy" missing years by making voluntary Class 3 NI contributions. The cost to buy a full year is currently around £900. This can "buy" you an extra £328 of State Pension per year for the rest of your life, an excellent and low-risk return on your money.
Conclusion: Small Tweaks, a Transformed Future
Boosting your pension doesn't necessarily mean finding thousands of extra pounds overnight. It's about being proactive and making smart, incremental changes. By ensuring you're getting your full employer match, cutting down on hidden fees, optimising your investments and making the most of tax relief, you can make a profound difference to your financial future. Take an hour this week to review your pensions your future self will be incredibly grateful.
Book a complimentary, no-obligation call with a FCA Regulated Financial Adviser to discuss your situation and build a retirement plan that gives you the confidence to move forward.
Written by
Joshua Shepherd
Independent Financial Adviser
Take control of your retirement, starting today.
Use Plouta to track your savings, forecast your retirement and get clear, practical advice tailored to your goals.
Disclaimer: This guide provides general information and is for informational and educational purposes only. It does not constitute financial advice. The value of investments can go down as well as up. Tax and pension laws are complex and subject to change. Always seek professional, regulated financial advice tailored to your specific circumstances before making any significant financial decisions, especially before transferring a pension.
