HOW YOU CAN PROTECT YOUR INCOME

Ask your pension scheme for a raise

FIONA Tait, technical director of Glasgowbased IFA Intelligent Pensions, advises savers in final-salary schemes to check if their income is inflation-proofed now. ‘You can find out if your pension is inflation-proofed by checking your most recent statement, your members’ booklet or on your scheme’s website,’ she says.

Pension schemes are able to offer discretionary increases and it can be worth asking yours for one. During the last bout of roaring inflation in the 1980s, many schemes increased payments to help their members. However, as most company pension schemes are less well funded now, they are unlikely to be as generous this time around.

Claim everything you are entitled to

MAKING up a shortfall in income is not easy when you are in retirement. However, Andrew Tully, technical director at pension provider Canada Life, advises making sure you are receiving every pension boost you are entitled to.

‘For example, if you are on a low income, you may be entitled to pension credit,’ he says. ‘Claiming pension credit also unlocks additional benefits such as a free television licence and help with heating bills.’

Go to www.gov.uk/pension-credit for more information.

Increase what you pay into your pension

MOST workers in the private sector today pay into a defined contribution scheme, which means the value of the pension is determined by how much they and their employer choose to put in.

Most workplace schemes require a minimum contribution of eight per cent – five per cent from the employee and three per cent from the employer.

However, Fiona Tait warns that this will be insufficient to maintain a comfortable lifestyle in retirement. ‘It is hard to increase savings when other costs are rising. But do it if at all possible – it pays off in the long term,’ she says.