{"id":304072,"date":"2025-11-24T16:26:18","date_gmt":"2025-11-24T16:26:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/304072\/"},"modified":"2025-11-24T16:26:18","modified_gmt":"2025-11-24T16:26:18","slug":"pension-hack-could-boost-your-retirement-savings-by-201k-and-reduce-stealth-tax","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/304072\/","title":{"rendered":"Pension hack could ‘boost’ YOUR retirement savings by \u00a3201k and ‘reduce’ stealth tax"},"content":{"rendered":"

Britons could boost their retirement savings by up to \u00a3201,000 and avoid a stealth tax on income thanks to a little-known pension hack<\/a>, analysts claim.<\/p>\n

Workers facing the squeeze from frozen income tax thresholds have a potential solution that could save thousands in tax whilst significantly enhancing their retirement funds. <\/p>\n

Research from Standard Life, part of Phoenix Group, demonstrates that channelling overtime earnings directly into workplace pensions offers dual benefits.<\/p>\n

This strategy helps employees avoid being pushed into higher tax brackets as wages rise, while simultaneously building retirement savings that could exceed six figures. <\/p>\n

\"Man<\/p>\n

A pension hack could reward Britons with a \u00a3200k retirement savings boost <\/p>\n

| <\/p>\n

GETTY <\/p>\n

The analysis reveals that regular pension contributions from overtime pay could transform retirement prospects, with examples showing increases ranging from \u00a3134,000 to \u00a3201,000 depending on contribution levels.<\/p>\n

Workplace pension schemes through auto-enrolment generally calculate contributions based on basic salaries, overlooking additional earnings like bonuses and overtime payments. <\/p>\n

Yet British workers put in substantial extra hours, averaging 215 annually according to recent surveys, Standard Life claims.<\/p>\n

These additional hours generate approximately \u00a34,022 in supplementary income for those receiving overtime compensation. <\/p>\n

\"Standard<\/p>\n

How much could you save for retirement? <\/p>\n

| <\/p>\n

STANARD LIFE <\/p>\n

Industries such as manufacturing and construction frequently offer premium rates for extra hours worked, often paying one and a half times standard hourly wages.<\/p>\n

For employees earning more overtime than required for immediate expenses, these payments represent an untapped opportunity to enhance retirement provisions whilst managing tax exposure.<\/p>\n

The figures from Standard Life’s research paint a compelling picture for workers starting their careers. <\/p>\n

An individual beginning full-time employment at 22 with a \u00a325,000 salary would accumulate approximately \u00a3210,000 through standard auto-enrolment contributions by retirement at 68, accounting for two per cent inflation.<\/p>\n

Adding \u00a3200 monthly from overtime payments transforms this outlook dramatically, potentially creating a retirement fund worth \u00a3344,000; an enhancement of \u00a3134,000. <\/p>\n

Those able to redirect \u00a3300 monthly could see their pension reach \u00a3411,000 in today’s money.<\/p>\n

Even modest additional contributions prove worthwhile, with \u00a3100 monthly overtime payments potentially adding \u00a367,000 to create a total pot of \u00a3277,000.<\/p>\n

Pension contributions benefit from tax relief, preventing overtime earnings from being taxed at higher rates when they would otherwise push workers into upper tax brackets<\/p>\n

\"HowHow much you could save by withdrawing money from your pension | GBN<\/p>\n

Standard Life calculated a 22-year old saving \u00a3300 from overtime contribution could bolster their retirement savings by \u00a3201,000 once they leave the workforce.<\/p>\n

Gail Izat, the managing director for Workplace Pensions at Standard Life<\/a>, noted: “With income tax thresholds potentially being frozen for longer at the Autumn Budget, rising earnings could push many more people into higher tax bands. <\/p>\n

“Redirecting additional pay like overtime into your pension is a smart way to reduce that impact while boosting your long-term savings. Auto-enrolment gives people a valuable start in saving for retirement, but many will need to contribute more than the minimum level to secure a comfortable retirement. <\/p>\n

“Adding extra contributions from overtime or other additional income can be a practical, budget-friendly way to strengthen your financial future – and because pensions are tax-efficient, these contributions can help you keep more of your income.”<\/p>\n","protected":false},"excerpt":{"rendered":"Britons could boost their retirement savings by up to \u00a3201,000 and avoid a stealth tax on income thanks…\n","protected":false},"author":2,"featured_media":304073,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,134,6107,131,132,5551,12384,3322],"class_list":{"0":"post-304072","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-money","13":"tag-pensions","14":"tag-personal-finance","15":"tag-personalfinance","16":"tag-savings","17":"tag-sgg","18":"tag-tax"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/304072","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=304072"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/304072\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/304073"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=304072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=304072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=304072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}