How to boost your retirement income
By following our top tips, you really can boost your retirement income to give yourself the comfortable retirement you deserve.
Pay off your debts
If you've paid off your mortgage, next on the list should be to pay off any outstanding debts, such as loans or credit cards.
- If you have any outstanding debts on credit cards, switch to a 0% balance transfer card and start channelling what you would have paid towards your mortgage towards paying it off
- If you have an unsecured personal loan, either pay it off with any spare money, or review the rate you're currently paying and use our unsecured personal loans best buys to switch to better rate - you should be able to get a rate as low as 6.3%
Start saving early
Once you have paid off your debts, start thinking about saving, especially as relying solely on the State pension is unlikely to give you enough income to live off.
- Think about when you plan to retire, and work out how much you'll need to maintain the standard of living you want
- Then review your current pension arrangements to work out if there's a shortfall that you need to make up by saving extra now Cash ISAs should be your first port of call - tax-free with rates up to 6.40%
- Fixed rate savings accounts are currently offering rates as high as 6.75%, so this offers the next best return for your savings, provided your happy to lock away your money for the specified term
- A top paying Regular savings account will get you a rate of 7.55% for a maximum deposit of £150 per month
- And, Internet savings accounts are currently paying up to 6.40%
Claim back Tax
The older you get, the more you can earn tax-free.
- This year, your tax-free allowance increases from £5,225 to £7,550 at 65
- This increases to £7,690 when you reach 75 if your income does not exceed £20,900
- You don't have to pay National Insurance Contributions when you hit State retirement age
- You can also claim tax back on savings, and if you've overpaid on PAYE and National Insurance
Maximise your pension
Pensions are also one of the most tax efficient ways of saving for your retirement, but it's also important to review your current pension arrangements, for example:
- Speak to a financial adviser first, as you may need to switch into lower risk funds to protect the capital gains you may have already made
- They will also be able to advise you if you're able to make more contributions
- You are eligible for the full basic State pension if you have paid National Insurance for enough qualifying years
- If you defer claiming your pension for a year, your State pension will grow
- If you think you may have other pension schemes you're no longer paying into, the Pension Tracing Service can you if you've lost track of them
Take advantage of retirement benefits
You may not be aware, but you can claim a whole range of benefits and discounts when you reach retirement age, from winter fuel payments to discounts on the high street.
- In Scotland and Wales, over 60s get free bus travel at any time of day
- In England, over 60s get free off-peak bus travel
- A senior railcard costs just £20 and offers you a hefty 33% discount off most rail fares
- Many high street stores offer discounts of 10% plus, so make sure you ask when you pay
- Many local authorities offer leisure cards for over 60s, giving discounts on a whole range of activities.
- Homes with a resident aged over 60 are eligible for a tax-free winter fuel payment to help keep warm, ranging from £100 to £300 per year.
- Those over 60 on a low income can get a pension credit, which provides a guaranteed minimum income of £119.05 a week for single people and £181.70 for couples
Get a better annuity
You may have paid into a company pension scheme for years, and may be planning on buying an annuity with most of your money. It's very important that you take the time to shop around when searching for an annuity, because rates can vary quite significantly. Use our annuity best buys to search for the best deal.
Endowments
Your endowment may be about to mature, and that could leave you with a substantial lump sum to follow our top tips with. But, don't forget to use our life assurance best buys to review your life assurance requirements, now that you're endowment has matured.
Related links:
- Compare Credit Cards
- Compare Loans
- Compare Savings Accounts
- Compare Life Insurance
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