Are You Saving Smartly? Hear What the Experts Say About Pensions – International Edition (English)

As the cost of living has increased in recent times, numerous British individuals find themselves unable to set funds apart for their retirement. Concurrently, with lifespans extending, the urgency to save becomes increasingly critical.

A survey conducted by YouGal reveals that 38% of participants in the United Kingdom do not have savings set aside for retirement. Approximately 28% save up to 10% of their yearly earnings for later life, whereas 22% remain uncertain about the amount they are presently setting apart.

Although numerous British individuals are preoccupied with pressing monetary concerns, specialists advise that it’s crucial to start thinking about pension planning at an early stage. Even small savings, coupled with proper management of those funds, can have a significant impact in the long run.

Below are several key suggestions for building your pension, gathered through discussions with financial experts. Although we concentrate on UK pensions, international readers may find useful information as well.


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Save as much as you can, as soon as possible.

It might be apparent, yet it bears repeating: the greater the amount you invest in your pension fund, the higher the likelihood of securing an impressive retirement income. Additionally, starting contributions early gives your investments—the type being either individual or employer-based pensions—more time to accumulate value over time.

“One effective method to enhance your pension is to maximize your contributions whenever you can,” said Helen Morrissey, who leads retirement analysis at Hargreaves Lansdown, to Euronews.

She suggested that one approach is to increase your contributions each time you receive a salary raise.

“You’re not accustomed to having additional funds in your wallet, so it becomes simpler to allocate part of it towards your pension,” Morrissey clarified.

Negotiate with your employer

In the United Kingdom, the majority of workers are automatically signed up for a pension plan. Typically, you would contribute 5% of your earnings to this retirement fund, with your employer required to add at least 3%, provided your annual income exceeds £6,240.

“Auto-enrollment minimum contributions are set at 8%; this is a positive beginning, however, you should aim to contribute even more for a better retirement income,” stated Morrissey.

She mentioned that certain employers might provide higher rates than 3%, potentially even mirroring your contribution levels.

An alternative proposal is a salary sacrifice arrangement. Your employer might permit you to decrease your salary or bonuses with the trade-off of diverting these funds into a pension plan, supplemented by additional contributions from your employer.

In addition to reduced income tax on these funds, both you and your employer will contribute lesser amounts towards National Insurance.

Stay engaged and informed

Maintaining control of your pension plan is crucial for accumulating savings, noted Claire Trott, who serves as the divisional director of retirement & holistic planning at SJP.

“At least once every year, assess what resources you have, what additional funds you might receive, and determine if they will suffice for your retirement,” she advised.

When dealing with personal and professional financial commitments, an effective approach involves thoughtfully selecting the destinations for your investment funds.

Contributions made at work will go into a pooled fund aimed at meeting the needs of everyone, but this might not always be the most suitable choice for you.

“The default fund could align with your goals. However, for most individuals, it’s merely satisfactory. You may find better options to utilize your funds,” explained Trott.

Utilize various financial instruments.

Setting aside money for your retirement isn’t solely about having a pension fund, since numerous alternative financial products are available.

“Pension investors can additionally use their tax-free ISA allowance to complement their pension,” said Lucie Spencer, a partner specializing in financial planning at Evelyn Partners, to Euronews.

Capital invested… has the potential to expand without being subject to taxes on earnings or profits, making it perfect for planning towards retirement. Keep in mind though, contributing to a pension plan actually raises your higher-rate tax threshold, thereby lowering income tax liability. In contrast, funds saved in an ISA are taken out after taxes have been deducted.

To put it differently, withdrawals from ISAs are tax-free, however, the funds deposited into them are subject to taxation.

Hold off on claiming your pension until it’s absolutely necessary.

The age at which you can claim your state pension — distinct from a workplace pension funded via National Insurance contributions — is presently set at 66. However, for individuals born after April 6, 1978, this eligibility age will rise to 68.

Alternatively, you have the option to access a private pension, such as certain occupational pensions, starting at age 55. However, this eligibility age will shift to 57 beginning in April 2028.

Many financial advisers caution against withdrawing from your pension prematurely since keeping it intact lets your investments increase over time. Additionally, collecting your pension while still working might bump you into a higher tax bracket, and there’s always the danger of depleting your funds too soon.

Think about consolidation options

It’s quite rare nowadays for individuals to remain employed by a single company throughout their entire careers, even though frequently changing jobs can have implications for their retirement planning.

When beginning a new job, your workplace pension does not transfer automatically. As such, you have the option to maintain your previous savings account separately from your current one or combine them into one.

“Consolidating means administration becomes much simpler when you’re ready to begin drawing your pension since everything will be in one location,” explained Claire Trott.

Nevertheless, she pointed out that combining pension accounts could result in missing out on benefits exclusive to each plan.

“One specific plan might outperform another. Therefore, if you have an older plan dating back to before 2006, it could offer significant advantages that plans initiated today lack due to legislative modifications,” she explained.

Utilize ‘carry forward’ provisions

Evelyn Partner’s Lucie Spencer similarly suggested that individuals should explore “carry forward” provisions. These enable savers to utilize unclaimed tax relief from the previous three fiscal years.

You’re permitted to contribute a specific sum to your pension annually without triggering regular income tax rates. For the 2025-26 fiscal year, the basic annual allowance stands at £60,000. However, “carry forward” provisions allow you to augment this limit under certain conditions.

“A significant bonus could also be utilized towards your pension savings. If you haven’t used any of your pension allowances over the last three years, you might have the opportunity to contribute as much as £220,000 gross into your pension by the close of this tax year on April 5, 2026,” Spencer explained to Euronews.

Do not overlook your state pension.

In conclusion, experts emphasized the importance of not overlooking your state pension — however, keep in mind that you won’t be handling investments in this scenario.

The sum distributed through a state pension relies on an individual’s tier of National Insurance contributions, which hinges upon the number of “eligible” years they have been employed.

In order to receive the complete benefit, you must accumulate 35 eligible years, and you should have a minimum of 10 years to qualify for any payment at all.

“Reviewing your state pension benefits through the HMRC application to identify any discrepancies in your records is crucial,” said Lucie Spencer.

“Although the deadline to address discrepancies dating back to 2006 has expired, individuals still have the opportunity to cover up to six years of missed payments. This retroactive payment strategy can significantly enhance one’s retirement funds since the state pension ensures a consistent monthly income throughout retirement,” she explained.

Although the state pension generally demands less oversight compared to workplace and private pensions, it remains an essential component of retirement planning.

“Just a heads-up: The details provided in this article aren’t intended as financial guidance; be sure to conduct additional research tailored to your individual situation. Keep in mind that our platform focuses on journalism with the objective of offering high-quality insights, suggestions, and expertise-based recommendations. Use the content on this webpage solely at your own discretion and risk.”