Keeping an eye on your savings

It doesn’t take long to run a quick check. Are the investments you’ve chosen still working for you? Are you paying in enough each month to get the retirement you want? And does your retirement savings goal and age still suit you?

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Every year, you’ll get a pension statement that shows you where you are and how much you’re looking at getting when you retire. But you can log into Optimize any time to check it out and make any changes.

Go to Optimize

What if you’re not on track?

If things have changed, or you’re not likely to reach your pensions savings goal, there are a few things you can do: 

This is the simplest way to boost your savings. IMI matches your contributions up to 6%, so it’s worth making the most of this.

You can aim to increase the value of your account by investing in higher return-seeking funds. But remember – the higher the rate of return, the higher the risk, so you need to be careful.

This means you’ll pay into your pension for longer and it’ll have longer to stay invested and grow. Not only that, your pension will need to be paid for fewer years, so you should get a bit more each month as it doesn’t have to go as far.

Change this in IMI Optimize to make sure your money goes to the right people.

Tax limits to know about

When it comes to pensions, there are a couple of tax allowance limits that you should know about – particularly if you’re a higher rate taxpayer. Keeping tabs on these limits and planning ahead can save you a lot of money.

Annual Allowance

Your pension contributions are tax-free, but only up to a certain amount – called the Annual Allowance. At the moment, this is £40,000 for most people.

If you do pay over £40,000 into your pension in a year, including IMI’s contribution, you won’t get tax-relief on contributions over this amount – and you could also be hit with a tax charge. But you can offset charges by carrying over any unused annual allowances from the previous three tax years. 

If you earn more than £200,000, your annual allowance might be less than this, and there are other exceptions too. You can take a more in-depth look on the government’s website.

Lifetime Allowance

This looks at all the money you have saved in all your pensions. Right now, the Lifetime Allowance limit is set at £1,073,100

If all your pensions add up to more than this, you’re likely to be charged tax when you take your pension. You’ll have to pay between 25% and 55% on the extra, depending on whether you take your money as income or as a lump sum.

If you think you might be anywhere near this amount, planning ahead is vital – and don’t forget any other pensions you have. 

If you think you might hit this limit, there are some HMRC protections that you can apply for. For a more in-depth look at the Lifetime Allowance, take a look at the government’s guidance