![](\"https:\/\/www.thesun.co.uk\/wp-content\/uploads\/2023\/10\/RB-PENSIONS-TABLE-2.jpg\")
<\/p>\nA PENSIONS expert has revealed her secret for boosting your retirement pot by up to \u00a3128,000.<\/p>\n
While a pay rise is a welcome boost in the cost of living crisis, the extra cash could go a lot further if you are able to save it for the future.<\/p>\n
<\/p>\n
Workers putting a pay rise into their pension now could be tens of thousands of pounds better off when they retire, according to Becky O\u2019Connor, director of public affairs at pension platform PensionBee,<\/p>\n
She said: "If you can live without the extra income today, then putting your pay rise in a pension can mean having an even bigger \u2018pay rise\u2019 later on, from your pension income.<\/p>\n
"A pay rise is a prime opportunity to boost your pension because you may not miss money you never had."<\/p>\n
You are automatically signed up to your workplace pension scheme through your job if you're over 22.<\/p>\n
This is separate to the State Pension and money is deducted from your pay unless you opt out.<\/p>\n A minimum of 8% goes into the pension – you contribute 5% and your employer paying at least 3%.<\/p>\n But you can pay in more than the minimum, and making the sacrifice today means in the future when you leave work your annual income from your pot will be higher.<\/p>\n The experts crunched the numbers to see exactly how much this increase could be depending on a person's age.<\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n PensionBee calculated that someone who is 22 now, with a starting pot of \u00a30, could see a \u00a3128,397 boost if they added a pay rise to their pension. <\/p>\n This is based on a salary of \u00a327,125 and adding the extra cash from an 8.5% increase – \u00a32,125 a year – to their pension. <\/p>\n Their estimated pension pot at 67 would be \u00a3182,186 without the boost, or \u00a3310,583 after.<\/p>\n The extra \u00a3128,000 would mean you could live off \u00a312,480 a year, instead of \u00a37,200.<\/p>\n By putting money in your pension, it's not just your money you're saving – you benefit from tax relief and investment growth over the years, especially if you start early.<\/p>\n Tax relief means when you pay \u00a380 into your pension, the government tops it up to \u00a3100, instead of taking the 20% tax on it.<\/p>\n The money in your pension is invested, for example in stocks and shares, and grows over time. By how much is hard to predict, but Pension Bee's calculations are based on 2.5% real growth.<\/p>\n Even later on in your working life, you could boost your retirement fund by putting a pay rise to work for you too.<\/p>\n Someone who is 30-years-old and earning \u00a332,550 a year could turn it into an extra \u00a3100,651 when they retire.<\/p>\n While a 40-year-old on \u00a334,528 would see more than \u00a390,000 added to their workplace pension at 67.<\/p>\n Even at the age of 50, the move could add \u00a356,000 when they reach retirement age – based on an assumed salary of \u00a343,400.<\/p>\n Becky added that the majority of employers will allow you to increase your contributions to whatever you want – either as a percentage of salary or in pounds and pence.<\/p>\n It means that if you know a pay rise is coming up, have a think about whether or not you can make the most of it in the long term by putting it in your pension.<\/p>\n Of course if you are in need of the cash, you'll need to consider whether you need the added money more now rather than in the future. <\/p>\n Or consider splitting up any rise you might receive, you don't need to put it all in. <\/p>\n Some employers also offer salary sacrifice schemes that allow employees to arrange for their pay rise or annual bonus to be contributed directly to their pension.\u00a0<\/p>\n To find out how to add more to your pension, speak directly to your employer.<\/p>\n There is also an Annual Allowance to consider, which is the maximum amount you can contribute to your pension each year while still receiving tax relief. <\/p>\n At the moment for 2023 to 2024 this stands at \u00a360,000, as long as you haven't already accessed your pension cash, which you can do at the age of 55 (though this is rising to 57 in 2028).<\/p>\n Even a 1% increase in your pension contributions – as little at \u00a3136 a year – could boost your pension pot by \u00a325k.<\/p>\n You could also save more for retirement by changing how your pensions is invested – and it won't cost a penny more.<\/p>\n![](\"https:\/\/www.thesun.co.uk\/wp-content\/uploads\/2023\/06\/79a8122d-0cdb-470d-ae18-98904e302b80.jpg\")
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