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5 smart ways to get more than the basic State Pension

If you pay National Insurance (NI) contributions or get National Insurance credits for 35 years, the New State Pension will pay you a maximum of164.35per week.

Crumbs! Thats not much money to live on. It works out at just over 712 per month, or around 8,546 per year. If youre looking for ways to get a higher income than that in retirement, read on for some ideas about what you could do.

Sadly, many people get to retirement age in this country only to find that they havent achieved 35 years of National Insurance contributions or credits. If that happens, you wont even get the maximum New State Pension, youll get a reduced amount instead. So, it pays to make sure you are getting National Insurance credits if you are entitled to them when youre unable to pay National Insurance contributions because of low income, patchy work, or inability to work.

Here are five smart ways to get more than the basic State pension:

Voluntary NI contributions

If you do find that your National Insurance record is incomplete, you may be able to make voluntary National Insurance contributionswith the aim of building your National Insurance record up. If you start in good time, you may be able to boost your State Pension up to the maximum amount.

Deferred State Pension

You could delay (or defer) taking your State Pension when you get to the governments State Pension age. Deferring could increase the paymentsyou get when you eventually decide to claim it.

Workplace pension scheme

Looking beyond maximising your State Pension, you could build up a second pension fund that will pay you another income in retirement.

One of the best ways of doing that is to pay into your employers workplace pension scheme if you have access to one. Every payday, a percentage of your pay will automatically transfer into the pension scheme. On top of that, your employer will usually also pay some in for you on top, and the government will give you and your employer tax relief on all the contributions.

So for every pound you put in, your employer will put some in and the tax man will put some in its a very efficient way of building up your pension pot!

Personal pension

If you cant get into a workplace pension, you could pay into your own personal pension. Personal pension providers will manage the funds for you by investing in shares and other assets. Youll still get the tax advantage that you get with a workplace pension, but, of course, you wont have the advantage of having extra contributions from your employer.

If you want to manage your own investments within your personal pension, you can go for a Self-Invested Personal Pension (SIPP).

Stocks and Shares Individual Savings Account (ISA)

If you really get the investing bug,another useful retirement-saving vehicle is the Stocks and Shares ISA. Currently, you can put as much as 20,000 each year into an ISA. Theres no tax relief on the money you pay in, but all of your investment gains are free of tax and theres no income tax to pay on the money you draw out, and you can draw the money out at any time.

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Femi Ogunshakin Managing Director
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