Yes and often employers will also match your increased workplace pension contributions. Many employers allow you to adjust your contributions, either through a fixed amount or a percentage of your salary. Increasing your contributions can be a smart way to boost your retirement savings and potentially benefit from employer matching contributions.
Things to Consider:
- Employer Contributions: Check if your employer will increase their contributions when you increase yours. Many employers match employee contributions up to a certain limit, so you could maximize your retirement savings by taking full advantage of this benefit.
- Tax Relief: Contributions to your workplace pension are typically eligible for tax relief, meaning that part of what you would have paid in tax goes into your pension pot instead. This can make contributing more a tax-efficient way to save.
- Affordability: Before increasing your contributions, consider your current budget and financial obligations to ensure you’re not overstretching your finances.
- Age Considerations: It’s crucial to seek professional financial advice before increasing contributions, as the best approach for you may depend on your age and stage of life. Younger individuals may benefit from investing differently perhaps taking on more risk, while those closer to retirement might need a different retirement planning strategy.
- Setting Up a SIPP: Given that many of us change jobs frequently, you might want to consider whether setting up a Self-Invested Personal Pension (SIPP) is appropriate. A SIPP can offer greater flexibility and control over your investments, especially if you’ve had multiple workplace pensions throughout your career.
- Amalgamating Workplace Pensions: It’s also worth exploring whether consolidating your various workplace pensions into one SIPP could simplify your retirement planning. Combining pensions can make it easier to manage your investments, but you should carefully consider fees, investment options, and potential benefits lost from your original schemes.
Consulting a financial adviser can help you make informed decisions and tailor a strategy that aligns with your goals and financial situation.
The value of pensions can fall as well as rise, you may get back less than you invested.
