For many of us, particularly given the impact that the pandemic has had on our lives, these reflections might be focused on our finances. Of course, financial goals will vary from person to person, whether it’s putting money aside for a holiday, buying a new car, spending less or simply saving more. One area worth considering is how your pension pot looks and whether you’re on track for the retirement you want.
To firstly gauge how much money you will need in retirement, the PLSA’s Retirement Living Standards can offer a good insight and is a topic we delved into previously here. The PLSA suggests tangible figures to aim for depending on how we expect our retirement to look. Using their tool in addition to our My Pension’s current pension value and online projectors can offer an insight into how our finances look now and also how they might fare in the future.
You may decide the time has come to top up your monthly contributions, particularly if retirement is edging closer and you want to boost your pension pot. There can be various reasons why you might want to increase the benefits you receive at retirement. Perhaps you would like to be able to retire earlier, or you feel the need to compensate for a career break. Maybe you’d just like a higher standard of living when you retire or perhaps you just have spare cash, and this is how you would like to utilise it.
Whatever the reason there are two flexible ways to increase your pension:
- You could pay Additional Pension Contributions (APCs) into your pension account at the North East Scotland Pension Fund along with your normal contributions.
- You could pay Additional Voluntary Contributions (AVCs) into your own personal account with Prudential, our AVC provider.
For more information on these two options visit here.
If you’re finding your pensions contributions to be too expensive or if times are financially tough, there is no need to stop paying into your pension altogether. You can reduce your monthly pension payments with 50/50. 50/50 allows you to pay half the contributions and build up half the pension. This way, instead of opting out and saving nothing towards your pension, you can continue to save for your retirement. As you are only paying half the contributions, you will only build up half the pension. As such your pension will be lower however being in 50/50 doesn't affect the value of any ill health or death in service cover. You would receive exactly the same cover as you would if you were paying full contributions so it can be a good short-term crutch during demanding times. With 50/50 you can choose to opt back in to the main scheme at any time and you can move between both options as often as you wish. To find out more about 50/50 visit Reducing your Contributions.
Different life and work events can affect your pension, so it is worth bearing this in mind if your circumstances have changed. Our website covers various different scenarios including divorce, changing jobs and maternity and absence. To find out more click here.