maximising-pension-savings

With the current cost of living crisis many people are feeling pressure on their finances, take a look at our guide to help you maximise your pension savings, so you can look forward to your retirement instead of dreading it. It's now even more important to get good financial advice and maximise the value of your pension savings.

About Tudor Franklin IFA

Tudor Franklin was established by Richard Meats and Bharat Chudasama, with a vision for a professional financial planning and advice service that can provide clear value to our clients at any stage in their financial life. With over 25 years joint experience advising clients on such matters as investments, pensions, inheritance tax planning and protection, we pride ourselves on being professional and delivering advice in a clear and understandable way.

pension retirement pension planning retirement planning financial advice PENSION maximise PENSION save tax tax relief retirement PENSION plan

About Tudor Franklin IFA

pension retirement pension planning retirement planning financial advice PENSION maximise PENSION save tax tax relief retirement PENSION plan

MAXIMISING  
PENSION SAVINGS
Get back to dreaming about your retirement.  
Not dreading it.
G U I D E  T O
SEPTEMBER 2022
However, even in the current  
climate there are ways to maximise 
the value of any pension savings 
you do have.
Free money from your employer 
When offered the opportunity to join a 
workplace pension, it’s nearly always a good 
idea to do so. For most people, your employer 
must automatically enrol you in a workplace 
pension scheme, and you may even be offered 
a pension plan if you don’t meet the criteria. 
Workplace pension schemes are made 
up of your own payments (5% or more of 
earnings) which are deducted from your 
salary, often before you pay tax, making 
it easier to save, and your employer’s 
contribution, which at the very least must be 
equivalent to 3% of your earnings. 
Many employers offer more than this or 
match any extra payments you make so it’s 
worth checking if you’re getting the most out 
of this valuable benefit.
Extra money from the 
government 
Anyone who decides against investing in a 
workplace or personal pension also turns 
down help from the government. That’s 
G U I D E  T O
MAXIMISING PENSION SAVINGS
Get back to dreaming about your retirement. Not dreading it.
Welcome to our Guide to Maximising Pension Savings. Many people are feeling the 
pressure on their !nances at the moment due to the backdrop of rising in"ation 
and the cost-of-living soaring. In these circumstances, it can be di#cult to think about 
your long-term !nances or even contemplate saving for the future. 
because in order to encourage people to save 
for retirement, the government provides a 
top-up called ‘tax relief ’ to pension payments. 
How you receive tax relief depends on the 
type of plan you have and the rate of income 
tax you pay. But as an example, if you’re a 
basic rate taxpayer saving into a personal 
pension in the current tax year, you get 20% 
tax relief on your payments. So, if you pay 
£200 a month into your pension plan, the 
£40 of tax relief you receive on that payment 
means it will only cost you £160. Higher rate 
or additional rate taxpayers could claim back 
even more.
Some workplace pension schemes offer 
tax relief in a different way, such as through 
salary sacrifice or exchange schemes, so 
check with your employer if you’re not sure 
how this works for you. And in Scotland, the 
tax relief details differ slightly. But in all these 
cases, the general point is the same: each time 
you defer paying into a pension plan, you 
miss out on an extra boost.
The State Pension will  
not cover everything 
Another common mistake is to assume that 
the State Pension will meet your retirement 
needs. However, it’s important to know that 
02
GUIDE TO MAXIMISING PENSION SAVINGS
the State Pension won’t be available until 
your late 60s, and may not cover all of your 
outgoings. 
Currently, the new flat-rate State Pension 
is £185.15 a week, or just over £9,600 a year. 
At the same time, the Pensions and Lifetime 
Savings Association (PLSA) calculates that a 
single person needs £10,900 a year for just a 
‘minimum’ standard of living in retirement. 
This rises to £20,800 a year for a ‘moderate’ 
lifestyle, which includes a car and some help 
with maintenance and decorating each year.
Keep a track of all  
your pension plans 
If you have moved jobs or home a few times, 
and not informed your pension provider, 
then one of these ‘lost’ pension pots could be 
yours. It’s worth spending time tracking down 
any potential missing pots to help boost your 
future finances.
The minimum contribution is 
unlikely to be enough 
Auto-enrolment has boosted the pension 
savings of millions of people but the 8% 
minimum payment may not get you the 
retirement lifestyle you want. It’s important, 
therefore, to have a retirement lifestyle in 
03
GUIDE TO MAXIMISING PENSION SAVINGS
mind – the PLSA calculations can be helpful 
here as they can give you a real figure to 
aim for, and you can then work out what’s 
feasible and put the necessary steps in place 
to help you achieve your goals.
Review your pension plan regularly 
You might not want to talk about your 
pension plan every day, but dismissing 
pensions as boring is a mistake, and one 
that becomes increasingly serious over 
time. While this might be difficult at the 
moment, steps such as topping up your 
payments, especially in your 20s, 30s or 
early 40s, can make a large difference, 
thanks to the snowball effect  
of compounding. 
Understanding your workplace or  
private pension, making sure you know 
how to get more ‘free’ payments from your 
employer or the government, or using it 
to pay less tax (such as through bonus 
sacrifice) could make a major difference to 
your long-term finances.
Understand where your  
pot is invested
A related mistake is not knowing where 
your pension pot is invested, whether that 
matches your life-stage and priorities or 
how to choose the right investment options. 
For example, if your retirement is still some 
years ahead, you could potentially afford to 
take a little more risk. Conversely, you may 
want to dial down the risk as you get nearer 
to retirement. n
A PENSION IS A LONG-TERM 
INVESTMENT NOT NORMALLY 
ACCESSIBLE UNTIL AGE 55 (57 FROM 
APRIL 2028 UNLESS PLAN HAS A 
PROTECTED PENSION AGE). 
THE VALUE OF YOUR INVESTMENTS 
(AND ANY INCOME FROM THEM) 
CAN GO DOWN AS WELL AS UP 
WHICH WOULD HAVE AN IMPACT 
ON THE LEVEL OF PENSION BENEFITS 
AVAILABLE. 
YOUR PENSION INCOME COULD 
ALSO BE AFFECTED BY THE INTEREST 
RATES AT THE TIME YOU TAKE YOUR 
BENEFITS.
TAX TREATMENT VARIES ACCORDING 
TO INDIVIDUAL CIRCUMSTANCES AND 
IS SUBJECT TO CHANGE.
NEED A HAND WITH YOUR 
RETIREMENT PLANS?
$e details surrounding pension rules 
are complex. Careful !nancial planning 
combined with our expert knowledge 
can help you manage your a%airs as 
tax-e#ciently as possible. To ensure 
you have enough money to have the 
retirement you want, please contact us.
“ANYONE WHO DECIDES AGAINST 
INVESTING IN A WORKPLACE OR 
PERSONAL PENSION ALSO TURNS 
DOWN HELP FROM THE GOVERNMENT. 
THAT’S BECAUSE IN ORDER TO 
ENCOURAGE PEOPLE TO SAVE FOR 
RETIREMENT, THE GOVERNMENT 
PROVIDES A TOP-UP CALLED ‘TAX 
RELIEF’ TO PENSION PAYMENTS.”
Published by Goldmine Media Limited, Basepoint Business & Innovation Centre, 110 Butterfield Green Road, Luton, LU2 8DL.  
Content copyright protected by Goldmine Media Limited 2022. Unauthorised duplication or distribution is strictly forbidden. 
This guide is for your general information and use only, and is not intended to address your particular requirements. The content should not be 
relied upon in its entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and 
timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate 
in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough 
examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of the 
content. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of, and reliefs from, taxation 
are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as 
well as up and you may get back less than you invested. All figures relate to the 2022/23 tax year, unless otherwise stated.
Making the right choices now could make a big difference 
to how much money you have in the future and saving for 
retirement could help you achieve your desired lifestyle.
To discuss your plans for the future and how  
we can help, please contact us.
WANT TO DISCUSS HOW 
TO MAXIMISE YOUR 
PENSION SAVINGS?