Savings firm, Standard Life has found that making one-off pension contributions of £1,000 every five years could boost retirement savings by up to £23,000 (by the time the saver reaches retirement).
The firm has said that making ad-hoc payments into a pension throughout your career can go a long way towards building a good retirement pot. Even smaller contributions can end up making a noticeable difference (after they’ve had the chance to grow and benefit from compound investment growth).
The Standard Life data found that those who begin work on a salary of £25k per year, and pay the minimum monthly (auto-enrolment) pension contributions (of 3% employee, 5% employer) from the age of 22, could retire at the age of 66 with a total retirement fund of £434,000 (not adjusted for inflation). However, those who topped up their pensions with nine one-off payments of £500 every 5 years, between the ages of 25 and 65 could be £11,000 better off in retirement.
For those people who are able to contribute more, for example £5,000 every five years between the ages of 25 to 65, could see retirement pot of £549,000 – that’s £115,000 more than if no additional contributions were made.
“It is very important to build a healthy retirement pot and a financial planner can help you to create a strategy aligned with your unique goals and financial situation. Begin saving for your retirement as early as possible; the sooner you start to save, the more time your money has to grow” says Claire Davison, financial planner
“Knowing what you want to achieve in retirement will help you determine how much you need to save. We always say regularly review your pension plan and adjust it as necessary, to ensure it remains aligned with your goals and risk tolerance. Financial planning is not one-size-fits-all. Your financial planner can provide personalised guidance and strategies based on your specific financial situation and goals”.