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Five ways to boost your pension pot

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07/12/2022
As new research reveals that three quarters of women could not cope in retirement without a share of their partner’s pension. YourMoney explores five ways to boost your existing pension pot.

Overall, the survey by investment platform Hargreaves Lansdown found that 27% of people said they could not manage in retirement without relying on some of their partner’s pension savings while 32% said they were unsure.

Pensions are often not discussed in divorce settlements, says Hargreaves, which can lead to one partner missing out on retirement income that they were relying on.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “It’s not uncommon in couples for one partner to take charge of certain aspects of the overall financial planning but relying on a partner’s pension risks leaving you in real financial difficulty.

“If you remain together forever, then it may well be fine to rely on a partner’s more generous pension provision, but if you were to split up then you could find yourself approaching retirement with very little.”

Issue affects women disproportionately

Morrissey says the issue disproportionately affects women because they are more likely to spend time out of the workforce to care for family. When they do return, it can be in lower paid or part-time work.

“If your partner has decent pension provision, it can be tempting to depend on that,” added Morrissey.

“But pensions are rarely spoken about during divorce proceedings. More emphasis is usually placed on assets such as the main property as people look more towards the more immediate concerns around who lives where rather than looking longer term.

“However, pensions can be one of the largest assets someone can have and so they should be an integral part of any negotiations.”

During divorce proceedings, a pension can be offset against another asset such as the family home, split between the partners or it can be paid out as an income once your partner reaches retirement.

Ways to boost your pension

  1. Many employers contribute at auto-enrolment minimum levels. But some employers are willing to boost their contributions if you increase yours in a process called matching. Ask your employer if they will match additional contributions you make and to what level.
  2. A spouse or partner can contribute to your pension. This can be useful during periods of time when you aren’t working. They can contribute up to £2,880 per year which will attract tax relief from the government topping it up to £3,600.
  3. Don’t lose track of old pensions. Research from the Pensions Policy Institute shows there is an estimated £26bn of lost pension money adrift in the system with the average pension pot worth over £9,000. Update your contact details with your workplace pensions and keep hold of paperwork. Contact the government’s Pension Tracing Service to track down lost pensions. You will need either your employer’s name or your pension provider and this service will give you contact details.
  4. Don’t forget to boost your state pension. You need 10 years’ worth of National Insurance Contributions to qualify for a state pension and 35 years’ worth to get the full amount. Many women, however, have gaps in their working record due to time out caring for family. You can buy voluntary National insurance contributions to fill gaps. Check with the Department of Work and Pensions before handing over your money. You may find you qualify for a benefit such as child benefit that comes with an automatic credit.
  5. Remember to fill out an expression of wish form. An expression of wish form allows you to say who you would like to receive your pension death benefits when you die. If they are not kept up to date, there is a risk someone you did not intend to receive your death benefits could get them. Hargreaves Lansdown research shows only 38% of people said they had kept expression of wish forms for all their pensions up to date.

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