Additional pension contributions

SJP Topping up your pension

Getting your retirement savings back on track either means making additional contributions, or pushing your retirement plans to a later date. If you are able to make further contributions, then there are a few things to consider, depending on what type of pension scheme you have.

If you have a Defined Contribution (DC) pension:

You can pay in one off lump sums during the tax year if you wish. (See ‘Annual Allowance’ and ‘Carry Forward’ sections) It may be worth considering using some of your annual bonus if you receive one. It is a good idea to take  financial advice, as carrying forward unused annual allowance may require a calculation to ensure you don’t exceed any limits.
If it fits with your budget, you can increase your regular contributions. If you have a workplace pension, see if your employer will also increase their contributions. Many will match your contributions if you pay in more.
Also, don’t forget you will still receive tax relief in the usual way on any additional lump sums or increased regular contributions.

If you are part of a Defined Benefits (DB) scheme:

The best course of action is to speak to your St. James’s Place Partner and employer; there may be ways to top up your benefits if the scheme rules allow, but this is best left to the experts to find out the right course of action.

Remember, you can save into other investments, such as ISAs, as well. It’s always a good idea to have a diverse range of assets to draw on for your future income needs.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise.  You may get back less than the amount invested.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Gaps in National Insurance contributions and topping up your State pension

The State Pension is often the cornerstone of many people’s retirement income. As well as being a valuable addition to your retirement, it will never run out, and the government will ensure it keeps pace with inflation.

Achieving a full State Pension now requires 35 years of National Insurance (NI) contributions. So, it’s important to know what your NI record is, how to access it, and how to fill any gaps. You can request a statement from HMRC, or set yourself up with HMRC online (through Gov.uk). This enables you to see how many years you have contributed in total, amounts for each year, and any gaps. (This is also available through the HMRC smartphone app).

If you have gaps in your NI record, for example if you had a career break, then the Gov.uk website has information on how you can make voluntary contributions. You will normally be able to make the top up payment within 6 years of the original missing year.

If you’re unsure what to do, speak to your St. James’s Place Partner as part of your retirement planning review. They will help to explain the value this can add towards receiving a full State Pension.

Talk to your St.James’s Place Partner 

Tracing lost pensions

If you have changed jobs a few times through your career, it is likely that you will have several pensions built up, which may be with previous employers, or through different pension companies. 

It’s worth keeping up to date with where your pensions are held, as well as how much they are worth, whether they are working hard for you and continue to be fit for purpose. If you’re not sure whether you had a pension at a previous employer, or if the company has changed name or been taken over, or cannot recall the pension company it is with, then there is help available.

The Pension Tracing Service is a free service offered by the Department for Work and Pensions. You can find this online at www.gov.uk/find-pension-contact-details. You can also contact them on Tel: 0800 731 0193

Even if you can’t remember your previous company details, the Pension Tracing Service may be able to help, which could make a huge difference to your retirement plans. 