Scott Snedden: Boost your pension

Picture: Getty ImagesPicture: Getty Images
Picture: Getty Images
Check your State Pension entitlement. From 6 April 2016, the State Pension will move to a flat weekly amount.

If you reach your State Pension Age after 6 April 2016 and have built up the maximum number of qualifying years (currently 30), you will receive £155.65 a week. Many people won’t quality for the full amount, however. To check your entitlement you can request a forecast from the Future Pension Centre (call 0345 3000168 or go to If you find that you’re not on track to receive the maximum state pension, you may be able to make additional payments to replace any missing years within your National Insurance record.

Increase Your contributions. 
The size of your eventual pension fund will, if you’re not among the lucky few in a final salary scheme, ultimately depend on four main factors - the contributions made, investment growth, the charges deducted and the timing of when you decide to draw benefits. It is a balancing act between living for today and saving for tomorrow, but it’s important to invest as much as you can realistically afford into a pension. The government helps by adding tax relief to any contributions you make, although this is subject to review within the Budget on March 2016.

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Get help from your employer. Workplace pension reforms that started in 2012 mean that by 2018, all eligible employees will be enrolled into a pension plan. One big attraction is that your employer has to make contributions to it. You might have to match this amount personally but the government will again add tax relief to your payments. You could also increase your personal contributions by agreeing with your employer to make them through salary sacrifice. This can reduce National Insurance Contributions for both you and your employer, and the savings can be reinvested into your pension.

Take Action Now. Legendary US investor Warren Buffett once said that “My wealth has come from a combination of living in America, some lucky genes and compound interest”. The first two points can be debated but the final point is in our own hands. The sooner you are able to make contributions to a pension, the more time these will have to grow and achieve interest. Through the years, this growth and interest itself compounds and your original sums increase.

Keep your eye on it. You should regularly monitor your pension plan to ensure the underlying investments are meeting your requirements, the charges remain competitive and that you are on track to meet your retirement goals. The benefits of compounding interest can be severely damaged by an expensive, underperforming arrangement.

• Scott Snedden is a chartered financial planner at Cornerstone Asset Management