How to boost your pension: 7 simple ways to a wealthier retirement
From making additional contributions to streamlining your savings, there are plenty of ways to boost your pension. Find out more with our guide.
It doesn’t matter if you’re in the run up to retirement or you have years to go, it makes sense to maximise your pension savings.
The bigger your pension, the more comfortable your retirement finances are likely to be. And, if you manage to build a really healthy pot, you may even be able to retire early.
Find out how much you and your employer pay into your work pension and top up contributions if you can.
Paying a bonus into your pension is a tax-effective way to use your windfall.
For more control you can use a SIPP to boost your retirement savings.
Consolidating your pensions and reviewing your investments may reduce your costs and improve performance.
Check your state pension – you may be able to boost it with voluntary contributions.
A financial planner can help you achieve your retirement goals.
Pay more into your workplace pension
It’s important to pay as much into your workplace pension as you can afford.
The minimum payments required under auto-enrolment rules are unlikely to be enough for a comfortable retirement.
Increasing pension contributions does take a bit of willpower, but it’s very tax-effective.
Tax relief on contributions means the more money that you pay in, the bigger the top up you’ll get from the government.
Over time this can give your pension a significant boost.
Some employers will also match your contributions up to a certain level, meaning you’ll get a bigger top up from them too.
Find out how much you and your employer are paying into your workplace pension, if you don’t know already.
The minimum required by pension rules is 8% of your qualifying earnings: that’s made up of at least 3% from your employer, with the rest paid by you.
Qualifying earnings are the range between £6,240 and £50,270 a year.
This means that the actual percentage of your earnings going into your pension may be less than you expect, especially if you’re a higher earner.
Many employers will be more generous but to plan effectively, it’s important to know where you stand.
Consider paying bonuses into your pension
If you ever receive bonuses from work, consider asking your employer to pay it into your pension.
Bonuses are taxed in the same way as salary. So, if it’s paid via payroll, income tax and national insurance will be deducted, taking a sizeable chunk out of your windfall.
However, by using so-called ‘bonus sacrifice’ (a type of salary sacrifice arrangement), you’ll get the full value of your bonus paid into your pension without any payroll deductions.
Just note that from April 2029, the rules on salary sacrifice are changing.
The maximum you’ll be able to pay into your pension and still get national insurance savings will be capped at £2,000 a year (although the full rate of tax relief will still apply).
What if I have a defined benefit pension?
If you have a defined benefit pension, you’ll get a guaranteed income in retirement based on your earnings and the length of time you were in the scheme.
You can’t, therefore, top up this type of pension in the same way. But you can ask your employer if it offers an additional voluntary contribution pension. This will be a defined contribution pot, managed separately from your main workplace pension.
Alternatively, you could set up your own personal pension, such as a SIPP and make additional contributions to that instead.
How personal pensions can help
If you want more control over your retirement savings, you could consider starting a personal pension, such as a SIPP, alongside your workplace pension.
These allow you to make flexible contributions and you’ll normally get access to a much wider range of investments than your workplace pension.
With a SIPP, this could include:
Funds
Exchange traded funds (ETFs)
Investment trusts
UK and overseas shares
A financial adviser can help you decide where to invest and how to manage your pot.
Boost your pension without paying more
Saving more is the obvious way to boost your pension, but there are other ways to increase your retirement savings.
By streamlining your pensions, you can make them more cost-effective and, potentially, boost your returns.
This could include:
Combining old workplace pensions into one
If you have several workplace pensions that you don’t pay into anymore, it may make sense to consolidate them into a personal pension or SIPP.
This can reduce your costs substantially, meaning you get to keep more of your returns.
However, it’s important to check whether you’d lose any valuable benefits (such as guaranteed annuity rates or GARs) first.
Switching to lower-cost investments
You may also be able to save money by switching to cheaper investments.
Passive funds (like ETFs and index trackers) charge lower fees than actively-managed funds.
Returns will only ever match the index, but with many active funds failing to beat the indexes they’re linked to, your performance won’t necessarily take a hit.
Reviewing your investment strategy
You should also check where your contributions are being invested.
If your investments are performing badly, or are too cautious, you may be able to boost returns by choosing alternative holdings.
While these steps could help you boost your pension, they are not decisions to be taken lightly and it may help to seek professional advice.
Hunt down lost pensions
If you have changed jobs frequently, check that you have the details of all the pensions you have paid into over the years.
According to the Pensions Policy Institute, there are now 3.3 million lost pensions, worth an average of £9,470.
So if you think you have any pensions that you’ve lost track of, it’s important to find them.
You can start by contacting old employers or, if that’s not successful, you can try the government’s free tracing service.
Don’t forget the state pension
In addition to your private pensions, it’s also wise to check in on your state pension, to ensure you get the maximum amount that you’re entitled to.
The state pension currently pays £241.30 a week (2026/7), but to get the full payment you will need 35 years’ of national insurance contributions (NICs). If you have more than 10 years’, but less than 35, you’ll get a proportional payment.
You won’t receive any state pension if you have less than 10 years of NICs.
You can find out where you stand by getting a state pension forecast.
If you have any gaps in your national insurance record, you may be able to plug them by purchasing voluntary contributions – an easy way to boost your state pension.
Get professional advice
There are plenty of pro-active steps you can take to boost your pension.
However, if you really want to maximise your savings or retire early, it makes sense to talk to a professional financial adviser.
They can tell you how much you need to save for a comfortable retirement and put in place a plan.
Unbiased can quickly match you with a financial planner that can help.
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