If you’ve been saving into a pension for a while, you might already be up to speed on how it works and where your pension money goes. But do you know how to make the most of your pension savings?

Paying more into your pension

If you can afford to, you might want to think about increasing your pension contributions or paying in a bit extra to give your pension savings a boost. Remember, your pension is invested and investments can go down as well as up, so you may not get back what you put in to your plan.

You can make a single contribution into your pension at any time. Your contributions may benefit from tax relief, if they do, then you’ll get extra help from the government to save for your future.

One thing to remember is that there is a limit on the total amount that can be saved each tax year whilst still receiving tax relief. For the 2022/23 tax year, you can get tax relief on contributions up to the greater of 100% of your earnings and £3,600.

There is also a limit to the amount you can pay in before you have to pay a tax charge. The limit is called the annual allowance and for the 2022/23 tax year it’s £40,000 - after that a tax charge may apply to your contributions. You can find out more in our pensions and tax - know your limits article.

If you have a workplace pension, you should speak to your employer about making any changes to your contributions – they’ll tell you what changes you can make and when you can make them.

Making pension contributions

Where does your pension money go?

When you save into a pension, it doesn’t just sit in an account somewhere until you retire. It's busy working hard in the real world so that when you’re older, hopefully you won’t have to.

When considering where to invest your money, we also think about what the companies that benefit from your pension are doing in the real world - and how they’re doing it.

How your pension can make a difference

At Royal London we are committed to be a Responsible Investor.

And that means looking at the bigger picture.

It’s about looking at Environmental, Social and Governance factors, or ‘ESG’ for short.

For example, we might look at a company’s position on environmental responsibility, cyber security, or boardroom diversity.

As part of this commitment, we’re asking all our asset managers to consider financially material ESG risks and opportunities when they make investment decisions.

And to be good stewards by voting and engaging with companies to improve the way they’re run.

We fully expect all asset managers who we choose to work with to be putting these principles into place.

To us, Responsible Investing isn’t about choosing values over value - it’s about managing risk, making better investment decisions, and generating better long-term results for our customers.