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How to maximise your contributions

There are three main factors that affect how much you have in your pot when you retire. Alongside the time you invest for (ideally, as long as possible) and how your investments perform, what matters is how much you put aside.

Of course what’s described below might not be relevant to you if your Plan does not allow additional contributions. Please refer to the Your Plan Explained document to check the rules that apply to you.

How to make the most of your contributions

1. Your employer might match your regular contributions

Some employers increase their contributions if you increase the monthly amount you put aside as well. This tends to be a direct match – if you put aside an extra 1%, they add an extra 1%, but there will be a maximum level they will match. For more information and to understand if this applies to your Plan, please see the Your Plan Explained document on PlanViewer.

2. Benefit from the power of time

If you are thinking about increasing the amount going into your retirement savings, it can make sense to start as soon as possible. That way your savings will have more time to grow, and they’ll have more chance to benefit from compounding. Noting that the value of your investment savings may fall as well as rise, and you may get back less than you save.

What is ‘compounding’?

Compounding is the snowballing effect of growth on the growth you have earned in previous months and years from your investments. And it can be a lot more powerful than many people realise.

In this example, you can see how two people both saved the same amount for their retirement. However by simply starting saving earlier, the early investor ends up at age 60, with more than twice as much in his pot than the late investor.

3. Consider making extra one-off contribution when you can

You may be able to make one-off contributions to your Plan – for example, from a work bonus. You’re unlikely to have these matched by your employer, but there may be other benefits depending on the country where you work and your employer. 

Find out more about how contributions work in your Plan by logging into PlanViewer and reading the Your Plan Explained document.

Should you pay more into your savings?

Use our calculator to see how a small change today can make a big difference to your savings tomorrow.