Seven Steps for UK Pensions and Taxes in 2024

Regardless of which part of the retirement journey you are on, it is important to have all of your pensions and taxes in order. Here we offer seven key steps that will help you on your way in 2024.

1. Check Your State Pension

• To receive the full new state pension, which is about £203.85 per week or £10,600 per year, you generally need a 35-year history of paying national insurance.
• If there are gaps in your national insurance contributions, you can boost your pension by checking if you qualify for voluntary national insurance credits. For example, if you were eligible for child benefit or universal credit, you might be able to backdate a claim for credits.

2. Restart Pension Payments

• Due to the cost-of-living crisis, many people may have reduced or stopped pension contributions. If you've faced financial challenges, resume contributions when possible.
• Set up reminders to regularly review and potentially increase your contributions. A salary increase or paying off a debt might provide an opportunity to contribute more.

3. Make Extra Payments

• Additional voluntary contributions (AVCs) allow you to contribute more than the standard rates, and some employers match these contributions.
• Explore free-standing additional voluntary contributions (FSAVC) plans, which are standalone pension pots you set up and fund yourself.

4. Find Old Pensions

• If you've changed jobs multiple times, you may have pensions scattered about. Use the Pension Tracing Service to locate them.
• Consolidate your pensions into one, like a self-invested personal pension (Sipp), for easier management and potential cost savings. However, be cautious about any features or charges that may apply when transferring older policies.

5. Face Your Pension Worries

• Overcoming the fear factor associated with pensions is crucial. It's never too late to make a positive impact on your retirement savings!

6. Review Your Investments

• Investigate where your pension funds are invested. Some may support industries like fossil fuels or weapons.
• Opt for eco-friendly options if available, such as ethical or sustainable funds, which some pension schemes offer. If unsure, consult the trustees of your scheme.

7. Complete Your Tax Return

• With the tax return deadline on January 31, gather necessary documents like P60, P45, and tax certificates for investments.
• The online tax return process is user-friendly. If your financial affairs are straightforward, you might be able to complete it in as little as 20-30 minutes. However, if you're a first-time filer, registration may take a bit longer.

We hope you have found these tips useful and they help you on your way to healthy and happy retirement!