With the cost of living rising in recent years, many Brits are struggling to put money aside for retirement. At the same time, life expectancies are rising, meaning that the need to save is becoming ever more pressing.
According to a survey from YouGov, 38% of UK respondents aren’t currently saving towards retirement. Around 28% are saving up to 10% of their annual income for old age, while 22% don’t know how much they’re currently putting aside.
While many Brits are wrapped up in immediate financial pressures, experts say it’s important to engage with pension planning as soon as possible. Saving even a little, and knowing how to manage that money, can make a big difference further down the line.
Here are some top tips to build your pension, collected from conversations with financial advisors. While our focus is on UK pensions, international readers can read more about other European schemes here.
Save as much as possible, as early as possible
This one may seem obvious, but it’s worth reiterating. The more money you put into your pension pot, the more likely you are to have a stellar retirement income. If you contribute when you are young, it also means that your investments — in the case of a personal or workplace pension — have time to grow.
“One key way of boosting your pension is to try and increase your contributions wherever possible,” Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, told Euronews.
One way to do this, she explained, is by boosting contributions every time you get a payrise.
“You aren’t used to having the extra money in your pocket so it’s easier to portion some of it to go into your pension,” Morrissey explained.
Negotiate with your employer
In the UK, most employees are automatically enrolled in a pension scheme. Generally, you will pay 5% of your wages into your pension pot, and your employer must make a contribution worth at least 3% if you earn over £6,240 a year.
“Auto-enrolment minimum contributions are set at 8% – this is a good start but ideally you need to be contributing more to get a good retirement income,” said Morrissey.
She explained that some employers will offer more generous rates than 3%, sometimes matching your contribution level.
Another option on the table is a salary sacrifice scheme. Your employer may let you reduce your wages or bonuses and instead allow you to funnel this money into a pension, topped up by employer contributions.
As well as paying less income tax on this money, this also means that you and your employer will pay lower National Insurance contributions.
Stay engaged and informed
Staying on top of your pension plan is an important part of building a nest egg, said Claire Trott, divisional director of retirement & holistic planning at SJP.
“Once a year — as a bare minimum — work out what you’ve got, what you’re likely to get, and whether it will be enough for retirement,” she explained.
When it comes to private and workplace investments, one way to engage is by carefully choosing where your contributions are invested.
Workplace contributions will be placed in an average fund designed to suit all employees, which may not necessarily be your best option.
“The default fund might suit what you want to do. But for the majority of people, it’s just okay. And you might be able to do something more with your money,” said Trott.
Make use of different financial products
Saving for retirement doesn’t have to simply revolve around a pension fund, as there are lots of different products on offer.
“Pension savers can also utilise their tax-free ISA allowance to run alongside their pension,” Lucie Spencer, partner in financial planning at Evelyn Partners, told Euronews.
“Money invested … can grow free of tax on income or gains, which is ideal for retirement saving. Take note, however, pension saving effectively increases your basic rate tax band to reduce income tax whereas savings into an ISA are withdrawn from net income.”
In other words, withdrawals from ISAs are tax free but the money put in is taxed.
Don’t take your pension until you need it
The age when you can access your state pension — which is separate from the workplace pension and built up through National Insurance contributions — is currently 66. For those born after 6 April 1978, it will be 68 years old.
On the other hand, you can currently take a private pension, including some workplace pensions, from age 55. This will increase to age 57 from April 2028.
Unless you need to, many advisors warn against taking your pension until you need it, as leaving it untouched allows the investments to grow. On top of this, taking your pension while earning can push you into a higher tax band — and you also don’t want to risk running out of money.
Think about consolidation options
It’s now very uncommon for people to stay with one company for their whole career, although job hopping has consequences for retirement planning.
When you start a new job, your workplace pension doesn’t automatically follow you. This means you can choose to keep your old pot separate from your new one, or you can consolidate it.
“Consolidation does mean admin is a lot easier when you want to start taking your pension, as it’s all in one place,” said Claire Trott.
Even so, she explained that grouping pension pots means you may lose out on scheme-specific perks.
“One particular scheme may be better than another one. So if you’ve got an old scheme, anything pre-2006, they can have really great benefits that you wouldn’t have in one started today because of legislation changes,” she said.
Take advantage of ‘carry forward’ rules
Evelyn Partner’s Lucie Spencer also advised people to look into “carry forward” rules, which allow savers to access unused tax relief from the last three tax years.
You’re only allowed to pay a certain amount into your pension each year before normal income tax rates kick in. The standard annual allowance for the 2025/26 tax year is £60,000, but “carry forward” rules mean that this can be topped up in some cases.
“A large bonus, for example, can be put to work in a pension, with a saver potentially able to make a gross pension contribution of up to £220,000 before the end of this tax year on April 5, 2026, if they have not used any of their pension allowances from the previous three years,” Spencer told Euronews.
Don’t neglect your state pension
Finally, experts said it’s important not to forget about your state pension — although you won’t be managing investments in this case.
The amount of money paid out by a state pension is determined by a saver’s level of National Insurance contributions, which depends on how many “qualifying” years you’ve worked.
To get the full amount, you need to have accumulated 35 qualifying years, and you need to have at least 10 years to get anything at all.
“Checking your state pension entitlement on the HMRC app for any gaps in your record is important,” explained Lucie Spencer.
“While the deadline to plug gaps all the way back to 2006 has now passed, there is still an option to pay for missing years over the past six years. Buying back missed years can be a great way for people to bolster retirement income as the state pension provides a guaranteed monthly income for the duration of your retirement,” she said.
While the state pension typically requires less management than workplace and private pensions, it’s still a key part of retirement planning.
“A reminder, the information in this article does not constitute financial advice, always do your own research on top to ensure it’s right for your specific circumstances. Also remember, we are a journalistic website and aim to provide the best guides, tips and advice from experts. If you rely on the information on this page then you do so entirely at your own risk.”
