You’ve taken the all-important step by opening a pension account with AJ Bell Dodl! Now, it’s time to add cash to it. Let’s explore why adding cash to your pension account is essential for your future financial security.
Giving your retirement security
Adding cash to your pension is a crucial step toward potentially securing a comfortable retirement. No matter what you earn, it’s important to start planning ahead. The earlier you start, the more time your money has to grow, hopefully giving you a larger nest egg to enjoy during your retirement.
The tax benefits
Pension contributions (the cash you add to your pension) come with fantastic tax advantages. You can pay up to 100% of your earnings for the tax year into your pension and receive tax relief, with a separate overall allowance of £60k per year across all contributions. The growth that takes place within your pension is also tax-free. This means more of your money stays invested, helping your retirement savings grow faster
Pension contributions up to £60k per year qualify for tax relief, boosting your investment significantly. For example, as a basic rate taxpayer, every £80 you invest receives a £20 top-up from the government, making your contribution £100. Higher and additional rate taxpayers can claim further relief on tax returns. Moreover, all growth within your pension is tax-free, enhancing the growth of your retirement savings effectively. Tax treatment depends on your personal circumstances and rules can change.
Benefit from compound growth
The sooner you add cash to your pension, the sooner you have the opportunity to start benefiting from compound growth. Compound growth occurs when you earn returns not only on your initial investment but also on the returns your money generates. Over time, this compounding effect can significantly boost your retirement savings.
Build a strong, bright financial future
Regularly contributing to your pension helps build a strong financial foundation for your future. It’s a disciplined way to ensure you’re setting aside money for retirement, giving you peace of mind and financial security.
Easy to manage
Managing your pension with Dodl is straightforward. Our user-friendly platform lets you track your investments and make adjustments with ease. You have all the tools you need to stay on top of your retirement goals until it comes time to withdraw your cash which you can do once you’re 55 years old, going up to 57 in 2028.
Long-term planning for retirement
Remember, your pension with Dodl is designed as a long-term investment strategy. It's crucial to view your contributions with a future-focused perspective, understanding that your investments will be growing towards a more secure retirement. Importantly, you can start accessing your retirement pot once you reach the pension age, which is currently 55, set to increase to 57 in 2028. This ensures that your investments have ample time to benefit from compound growth, maximizing your financial stability in later life.
Ready to add cash to your pension?
Adding cash to your pension with Dodl is a smart move toward a hopefully securing a comfortable retirement. Enjoy the tax benefits, benefit from compound growth, and start to build a strong financial future. Start adding cash to your pension today and you could watch your retirement savings grow!
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Practical steps to add cash to your pension
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🔔 Remember investing carries risk and nothing in this article should be taken as advice - Dodl doesn't give advice, but we do hope the info is helpful!