Get paid for saving
Up the contributions you make to your pension scheme. Most large and medium-sized companies will match whatever you pay in, so the more you pay in, the more your company does. Plus you get a tax rebate on the money you do pay in, so if you are a higher rate taxpayer paying 40 per cent tax you only have to pay in £60 to get £100 worth of contributions. If your employer is generous enough to match your contributions, paying just £60 more a month into your pension can increase your salary by £140 a month, or £1680 a year.
You don’t have to have a company pension to give yourself an annual bonus – find a pensions advisor who can help you.
Hidden benefits
If you are a keen gym-goer switching to a subsided corporate scheme can often halve monthly payments – but only if you are already using a gym! A health insurance scheme, which covers you and your family, and added cover, such as death in service benefit, can also add hundreds of hidden pounds to your annual salary. Remember though, some of these benefits are taxable (unlike a pension).
Inflation proof it
Inflation can seriously bite into your income, but it isn’t as inevitable as you think. One way of making sure you don’t feel the effects of rising prices is to buy an escalating annuity. This pays a lower rate initially when you retire but rises each year to offset price rises. Inflation-linked annuities generally become better value the longer you live and the higher inflation is. At the age of 65, about 20 per cent of men and a quarter of women can expect to another 25 years. However, what annuity you go for will depend on your own circumstances which is why it so important to take advice to find the best one for you.
An unhealthy profit
Talking of annuities, did you know that you can save up to 60 per cent if you are eligible for an impaired or enhanced annuity. These are annuities that pay a higher-than-normal income if you have a health problem that threatens to reduce your lifespan. Relevant health problems might include, a history of cancer, chronic asthma, diabetes, heart attack, high blood pressure, kidney failure, multiple sclerosis or stroke.
You might be able to get an enhanced annuity if you are overweight, or smoke regularly. Some companies also offer higher rates to people who have worked in certain occupations or who live in certain areas of the country.
Time is money
Using your time wisely – for example use your lunch hour to make sure your savings and investments are earning as much interest as possible and that you are not paying tax unnecessary taxes. Get advice from a financial planner.
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