Investment expert Robin Powell says “not enough people are asking” their employers to put more into their pensions, and it’s a simple way to increase the jackpots. On the Informed Choice Radio podcast, Mr. Powell discussed the benefits of self-advocating to push the boundaries and potentially receive more.
“It is certainly worth asking. “
Martin Bamford, host of the podcast, stressed the value of sacrificing bonuses as a way to further increase pension funds.
The bonus sacrifice is when a person pays their work premium into their pension instead of paying it into their bank account.
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He said: “When the time for bonuses comes every year, the future-thinking employees here always ask us to make that bonus sacrifice and put that money into the pension and we can see that vision for the future with them.”
By doing this, people can save a significant amount of taxes and create wealth for their future.
It is important that the British invest in things that will work as hard as possible for them.
This is why people need to know exactly what their workplace offers and if it can be maximized.
Mr. Powell suggested that people should ask questions such as “Do you match my contributions?” Instead of simply offering the minimum rate of three percent.
Some companies may say “if you pay eight percent we’ll also pay eight percent,” so there may be an opportunity to get more money.
Most working people should have access to an employer pension and should already be automatically enrolled.
The government introduced automatic enrollment in 2012 to help more people save for retirement so that people start contributing to retirement as soon as they receive the required salary.
Minimum total contributions for automatic enrollment have been set by the government at eight percent for most people.
Employers must contribute a minimum amount; in most cases, it’s three percent.
The government is helping people save for retirement by also giving tax relief on their contributions.
So, people contribute four percent to their pensions while their employers contribute three percent, and the government adds a one percent tax break totaling a minimum of eight percent.
Eight percent is the minimum, so Brits should ask their employers that it is possible to increase their contributions to really maximize their pots for the future.