My Celebrity Life

How to get the most money out of your pension

It is easy to ignore your pension when retirement is years, if not decades, away.

Why worry about it when you’re trying to make ends meet right now? You will deal with it later.

But the longer you leave it, the higher the chance that you are passing up free money.

Your workplace pension is a great place to start. Find out by how much your employer will match your contributions.

It will be a minimum of 3% but can go much higher. If you boost how much you pay in, you will get more from them.

On top of this there is tax relief on your pension payments. If you earn under £50,270 then for every £80 you pay in, you’ll get £20 added by the Government.

If you earn more than this — up to £150,000 a year — it’s £40 added for every £60 you pay in (subject to some limits), making it a really attractive option for your cash.

And then there’s the state pension. You might be vaguely aware that the age you will receive it keeps being pushed back. Those of you under 30 might be looking at reaching 70-years-old before you get the money.

That’s if you get it at all, as it’s not guaranteed. You need to build up qualifying years of National Insurance (NI) contributions, with ten years required to get the minimum-level state pension.

And to get the full amount, you’re probably looking at 35 years but it can vary — I only need a total of 30 whereas for my wife, it’s 32.

That shouldn’t be an issue if you are working full-time or claiming certain benefits for most of your adult life.

But if you’ve had long periods off work or you haven’t earned enough, you might have gaps in your NI record. And those missing years can mean you lose out later in life.

The good news is you can make voluntary top-ups to fill gaps, but normally this is just for the last six years — which doesn’t help much if you’re close to quitting work.

However, until April next year the period you can backdate contributions has been extended to 16 years. So this is a good opportunity to find and check your state pension on the Government website.

If there are gaps, and if you are worried about how much time you’ve got left to reach the required number of years before retirement, then you can look into making extra National Insurance contributions.

Get paid to open an account without switching

I’m a keen advocate of switching banks, largely to nab the free cash on offer. But I’m often contacted by readers who don’t want to switch their main account and feel left out.

The good news is a handful of banks will give you money or a voucher for opening up an account without the need to switch. The main one is First Direct, offering £20, though taking this deal rules you out of larger-paying switching deals in the future (currently £150).

Or you could look at opening a TSB Spend & Save account via TopCashback, where you can earn £20 or £40, though you’ll have to jump through a few hoops. Elsewhere, you’ll need to be referred by a friend.

The biggest paying is Triodos Bank, where you get a £60 voucher to spend at Neal’s Yard or Ethical Superstore, although this account comes with a £3 monthly fee.

An easier get is Chase Bank’s new £20 refer-a-friend promotion, or there’s £5 available at Monzo. If you don’t have a friend who’s an existing customer then a quick look online should find you plenty of shared links and codes.



Andy’s best buys

Triodos

Welcome offer: £60 voucher
Conditions: Deposit £100
Availability: Refer-a-friend link

TSB

Welcome offer: £20 or £40 cashback
Conditions: Pay in £500 and make two debit payments a month in three of the first four months
Availability: Via TopCashback

Chase Bank

Welcome offer: £20 credit
Conditions: Deposit £20
Availability: Refer-a-friend link

First Direct

Welcome offer: £20 credit
Conditions: Log into online First Direct website banking within three months
Availability: First Direct Website

Monzo

Welcome offer: £5 credit
Conditions: Use debit card within 30 days
Availability: Refer-a-friend link

For more details on these offers head to becleverwithyourcash.com/banks

Andy Webb is an award-winning blogger and podcaster from Be Clever With Your Cash. Follow Andy on Twitter, YouTube and Instagram via @andyclevercash

 


Credit: Source

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