Savers don’t need a massive salary or market expertise to make huge lifestyle sacrifices to start ‘pensionmaxxing’. In just 10 minutes, they can efficiently get a clear sense of their pots and make a few low-effort digital tweaks to ensure they’ve squeezed the most value out of every pound saved.
Robert Cochran, Pensions Expert at Scottish Widows shares his top tips on ‘pensionmaxxing’:
1. Pot-Maxx: Reclaim your lost cash
“People are changing employers an average of 12 times*during their career, and often leaving behind their employer pension pots. Digital tools, such as the Scottish Widows app, allow people to identify, review, and consolidate old schemes into a single managed account efficiently.”
2. Match-Maxx: Grab the 100% free pay rise
“Leaving your workplace pension on default settings is financial self-sabotage. Instead, find out how much more your employer could add in, as many will match your contributions over and above the minimum. This is an immediate, guaranteed way to boost your pension pot. Don’t leave free money on the table.”
3. Target-Maxx: Think about your future lifestyle
“Scottish Widows’ Retirement Report found that 12.2 million UK adults are heading straight toward pension poverty, so it’s important to first understand exactly how much you have saved for the future. Then you’ll be able to map out what you’ll need to afford retirement and how to get there. Using retirement calculators and looking at the Pensions UK Retirement Living Standards will be helpful as they can help you see just how much is needed to afford a basic or more comfortable lifestyle later on.”
4. Self-employed Maxx: Auto-feed your solo pot
“A third of self-employed workers face a poverty-line retirement; skipping a pension because you don’t have an ‘employer match’ is a trap. Set up a recurring, flexible direct debit into a personal pension on invoice-payday. While immediately benefiting from government tax relief, it will make your pension contributions more valuable than simply putting the same money into an ordinary savings account. For example, for every £80 you contribute, you get £100 invested in your pension. The extra £20 is the basic-rate tax relief of 20%.”
5. AI-Maxx: Keep smart tech in mind
“Take the guesswork out of planning by using the AI chatbots built into provider apps for instant answers. For example, the Scottish Widows’ App offer a host of interactive guides, calculators, games alongside tools like its Career Break Modeller and in-app Pension Tracing tool to locate lost pots from previous jobs using just your National Insurance number. Best of all, you can map your compounding growth in real-time. Finding an extra £50 a month now can dramatically outpace averages over the long term. There’s a lot of fear about how trustworthy AI information is right now, but pension providers are creating ways to use it that are secure and offer protection to users. Scottish Widows has built an agent in its app – Invest AI – which helps people start investing.
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