How can I boost my pension income?
For many people retirement can come as quite a shock, especially when they have to become accustomed to living off a retirement income in contrast to a regular salary. For this reason, many people look for ways to improve their pension incomes and receive a higher yearly income which may support a lifestyle that they have become accustomed to.
There are a number of different ways that a person could choose to raise their pension income but one of the most popular ways currently is working for a longer period of time. Currently within the UK almost one third of people are working past the retirement age, with the hope of saving additional money for their retirement.
Deferring a pension
One way that many people choose to boost their retirement pension is by working for a few extra years and then deferring their pension accordingly. This can be a risky task as it takes a number of years before you will start to reap benefits from deferring tax in this manner.
If you are looking at deferring your pension for five years then you will need to live at least another 15 years before you start reaping the benefits of a deferred pension, although statistically the average life expectancy dictates that this will likely happen, if you were to die before this time was up then you would end up making a loss by deferring your pension.
Buying National Insurance years
By law, in order to be eligible for a State pension you need to have paid in for a certain number of years to the National Insurance fund. If you haven’t paid in for the correct number of years then you may find that you are unable to claim 100% of the State pension and are therefore left with only a certain percentage, and a smaller amount of retirement income.
One way that you can boost this type of income is by buying additional National Insurance years to make up your total to the point where you will receive your full State pension. Currently some people are eligible to buy up to six years of National Insurance contributions from the Government.