New Year, New Savings Goals?
January often brings about change and new beginnings. Many of us might be re-evaluating how we live and making plans of what we want to achieve during the next 12 months.
For some of us, these could be high-hitting personal ambitions while for others these could be smaller financial goals. Even if New Years Resolutions don’t resonate with you, having a think about how you want the next year to look from a financial perspective could stand you in good stead for the future. With the Cost of Living crisis affecting us all, thinking beyond the here and now might seem daunting, but even spending a few minutes thinking about future plans could make a huge difference to your retirement.
If you’re looking at your pension and finances, one of the key benefits to remember is contribution flexibility. This means that you are able to top up your pension or reduce contributions depending on your personal circumstances.
Paying More
There can be many reasons why you might want to boost your pension pot by paying more towards it. You might be hoping to retire earlier, or feel the need to compensate for a career break you’ve had. Maybe you’d just like a higher standard of living when you retire.
Whatever the reason there are two flexible ways to increase your pension:
- You could pay Additional Pension Contributions (APCs) into your pension account at the North East Scotland Pension Fund along with your normal contributions.
- You could pay Additional Voluntary Contributions (AVCs) into your own personal account with Prudential, our AVC provider.
For more information on paying more click here.
Reducing Your Contributions
We also recognise that everyone goes through times where finances are stretched. As a member of the NESPF, you can reduce your monthly pension payments with 50/50. 50/50 allows you to pay half the contributions and build up half the pension. This way, instead of opting out and saving nothing, you can continue to save towards your retirement.
As you are only paying half the contributions, you will only build up half the pension, meaning your pension will be lower at retirement. Because of this, 50/50 is designed to be a short term option for when times are financially tough. As such you'll be brought back into the main section where you pay full contributions around every 3 years. You'll be told when this is happening and will have the option to continue with 50/50 and if you wish you can move between 50/50 and the main section as often as you need to.
To find out more about 50/50 click here.
Be Retirement Ready
Many of us pay into our pension without giving it much thought, you might simply see the payment come off our wage slip each month, knowing that in 10, 20 or 30+ years you’ll see that money again. However whether that monthly payment it is enough for the lifestyle you want to lead in retirement is also a crucial factor.
If you are unsure of whether you’re on track for the retirement you want, you can use our handy Retirement Planner tool on our My Pension+ website. This tool performs calculations using your expenditure versus income to help ensure your pension pot matches your retirement lifestyle.
You simply have to choose the lifestyle that appeals to you, input your outgoings and see if you’re on target for your goal. The tool outlines what certain sums of money translate into, in terms of food shopping, holidays and spending money and so it can be helpful way to see how your pension pot can cover tangible items. Members of the NESPF can access My Pension+ here.
