Put those savings to work
Did you find yourself spending a lot less during the pandemic? If so, you’re not alone.
Recent statistics from Aldermore Bank show that households reduced their spending by £110 per week on average, as the UK became a nation of savers. Which is why it might be a really good option to put some or all of the money you saved into your pension.
A pension, after all, is one of the most tax-efficient ways to save for your future. The Government encourages pension savings by giving tax incentives, known as tax relief. And the more you save into your pension, the more help you’ll get from the Government.
Why not consider Pound Cost Averaging?
This is the concept of making regular contributions to your investments in order to smooth out market volatility.
By making regular contributions to either your pension or investments, you naturally purchase fewer units when prices are high and more units when prices are low. Over the long-term, this strategy will not only create a disciplined investment approach, but also help you take advantage of volatile periods and potentially improve your returns.
NB: Investment returns are never guaranteed, however. So, while there is a chance that your savings could grow, their value can also go down. This means you could get back less than you put in.