Mum fears she has no time left to save in pension: How to boost savings in a ‘short-time’

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Pensions: Expert offers tips for contributions

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On the Rewirement Podcast, presenter Angellica Bell spoke to Di, 57, who is trying to see how she can provide for her retirement. She raised her son alone and as a result missed some years paying into her pension.

She said: “Now I find myself around seven to eight years before my retirement age thinking, ‘Have I got enough time to do anything?’

“Now I find myself in a much better financial situation so it’s daunting to now only think about what I’m doing with a short amount of time left.”

Her company had previously enrolled her into her workplace pension however she opted out as she had other things to pay for.

Angela Kirkwood at Moneyhelper gave suggestions to Di about what steps she can take next for retirement.

She said: “Anything you can put away at the moment is definitely worth doing.”

Discussing putting money in a pension, even for a short amount of time, she said: “We have to remember the benefits of employer contributions and tax relief. This actually increases the amount you have invested.”

Ms Kirkwood explained that under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it.

This is called ‘automatic enrolment’. The minimum auto enrolment contribution to an employee’s pension savings is eight percent of qualifying earnings.

Employers must pay at least three percent and the employee pays the remaining five percent.

Some employers will pay more into one’s workplace pension if they agree to increase their contributions too.

This is known as ‘contribution matching’. It could help build one’s retirement savings faster.

However it is important to make sure that people afford to pay more in.

Most people will receive tax relief from the Government when they pay into a workplace pension.

Tax relief is one of the major benefits of saving into a pension.

Ms Kirkwood said: “As you’re going to invest that, you want the best chance of growth but you possibly haven’t got a lot of time to take a lot of risk that you would if you were younger.

“But there are options. So one of the really important things that a financial advisor would do is assess how much risk you could afford to bare and match up the investments that suit you that have a profile that allows you to have growth.”

Di responded: “Given the short amount of time I have left to plan for my retirement, I think my risk appetite has to be high.

“I never thought I’d be in this situation but I raised a child by myself. That’s why I’ve come to this as late as I have.

“I expect a lot of woman will be feeling this.”

Rewirement from Legal & General is available on all podcast providers.

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