Planning for retirement is one of the most critical financial steps you’ll ever take. Your pension is a key pillar of your retirement income, and making the most of it before you retire can mean the difference between just getting by and truly enjoying your golden years. The good news? It's never too late to optimise your pension savings and secure your future.
Whether you're in your 40s or approaching your retirement date, there are several strategic moves you can make to help maximise your pension. Below, we’ll break down actionable steps you can take now to ensure a more financially secure retirement.
1. Understand Your Pension Plan
Before making any decisions, the first step is to thoroughly understand the type of pension plan you have. There are typically two main types:
Defined Benefit (DB): Offers a guaranteed income in retirement based on your salary and years of service.
Defined Contribution (DC): Relies on the amount you and possibly your employer contribute, along with investment performance.
Knowing the structure of your pension will help you make more informed decisions. Review your annual pension plan statements, understand your projected income, and see what options you have available upon retirement.
2. Increase Your Contributions
One of the simplest and most effective ways to grow your pension is to increase your contributions. Even a small increase can have a big impact over time due to compound growth. If your employer matches contributions, try to contribute at least enough to get the full match — it’s essentially free money.
John Labunski, a trusted name in retirement planning, often advises clients to treat pension contributions like a non-negotiable expense. By consistently prioritising your pension, you’ll build a stronger financial cushion for the future.
3. Review Investment Options
If you have a defined contribution plan, your pension’s performance will be heavily influenced by how your money is invested. Make sure your investments are aligned with your age, risk tolerance, and retirement timeline.
For example:
Younger savers may benefit from a more aggressive portfolio with a higher proportion of stocks.
Those nearing retirement might want to reduce risk by shifting to bonds or lower-volatility options.
It's wise to review your investment choices annually and rebalance your portfolio as needed. Consider seeking help from a financial advisor, like John Labunski, to help ensure your investment strategy is optimised.
4. Delay Retirement (If Possible)
Delaying your retirement by just a few years can significantly boost your pension. Here’s how:
Your pension pot has more time to grow.
- You’ll make additional contributions.
- You’ll shorten the number of years your pension needs to cover.
- If your health and work situation allow it, pushing retirement out by even 2–3 years can increase your income and offer greater financial security.
5. Consolidate Old Pension Pots
Many people switch jobs throughout their career, leaving behind multiple pension pots. Managing several plans can be confusing and may result in higher fees or forgotten funds. Consider consolidating your pensions into one plan with lower costs and better investment options — just make sure there are no exit penalties or loss of guaranteed benefits.
Consolidation makes it easier to track your overall pension value and ensures your money is working efficiently for you.
6. Use Tax Relief Wisely
Pension contributions often come with tax benefits. In many cases, the government adds tax relief to your pension contributions — essentially boosting your savings at no extra cost to you.
For higher earners, these tax savings can be especially significant. Ensure you're taking full advantage of available tax relief while staying within annual and lifetime allowance limits.
7. Consider a Financial Advisor
While it’s possible to manage your pension on your own, working with a qualified financial advisor can help you avoid costly mistakes and uncover strategies you may not have considered. An expert like John Labunski can assess your unique situation and create a tailored plan to maximise your pension and retirement goals.
An advisor can help with:
Pension consolidation
- Investment strategy
- Tax efficiency
- Income drawdown plans
- Estate planning
- Final Thoughts
Maximising your pension before retirement is about taking proactive steps today to secure a more comfortable tomorrow. By increasing your contributions, making smart investment choices, and potentially delaying your retirement, you can boost your income and gain greater peace of mind.
And remember, you don’t have to navigate it alone. Trusted financial advisors such as John Labunski offer personalised guidance to help you get the most from your pension and retire with confidence.
The sooner you start optimising your pension, the better. Retirement might seem far off, but every decision you make now lays the foundation for a future that’s truly yours to enjoy.
