Retirement planning has a habit of slipping onto tomorrow’s to-do list, because it feels like such a distant goal. But as we’re often reminded, the years have a way of flying by. It’s no surprise then, that 6 in 10* people have regrets about their retirement planning – the most common? Not starting sooner.
13% of people also regretted assuming they would have enough money for retirement. And with only 43% currently on track for an adequate retirement income, many are facing shortfalls later in life unless they act.
Taking a moment now to picture what you want your retirement to look like can give you a better idea of how much you need to get there. A pension calculator tool can be a useful steer on what you’re on track to achieve by your desirable retirement age. But this is not a one and done exercise, you should review your progress periodically so you have time to adjust course if needed.
The earlier you start, the longer your money can grow. And with the end of the tax year approaching, there’s plenty you can do before this year’s deadline to avoid future regrets. Not to mention all the generous tax perks that pensions offer.
This article isn’t personal advice. Remember, you can normally access money in a pension from age 55 (rising to 57 in 2028). Tax and pension rules can change and benefits depend on your circumstances. Scottish taxpayers have different tax rates and bands. If you’re not sure if an action is right for you, ask for financial advice.
Make the most of your annual allowance
For one in five people, the biggest retirement regret is simple – not contributing more. But you may be able to make up for lost time.
The annual allowance (the maximum that can be contributed across all your pensions each tax year) is £60,000 for most people. Tax relief on personal contributions is also capped at 100% of your earnings. But pensions come with a unique feature – called ‘carry forward’ – so you may be able to use any unused annual allowance from the three previous tax years provided you were a member of a registered pension scheme in the years from which you wish to carry forward.
However, if you are making a personal contribution, you must have sufficient earnings to support the big payment and receive the accompanying tax relief. There are some more rules to be aware of before utilising carry forward, so make sure you understand the pension carry forward rule and annual allowance first to get the facts.
Maximise employer contributions
Don’t make the same mistake as the 7% who regret not taking full advantage of their employer contributions.
If your employer runs an incentivised scheme, whereby if you pay in a bit more, your employer does too – if you can afford it, contribute more and don’t leave free money on the table.
With a salary sacrifice scheme, the money also goes into your pension before you pay income tax or National Insurance (NI). NI savings are 8% for basic rate taxpayers and 2% for higher and additional rate taxpayers.
A basic rate taxpayer paying £300 a month into their pension via salary sacrifice sees the effective cost reduced to just £216 – made up of £60 income tax relief saving at 20% and £24 NI savings. Over a year, just those additional NI savings add up to around £290.
But remember, changes being introduced in April 2029 will cap NI relief on the first £2,000 of employee pension contributions made via salary sacrifice. So there may only be a few more tax years to make the most of the additional savings.
Higher-rate taxpayer? Remember to reclaim your tax relief
Tax relief is available at your marginal rate.
If you contribute to a personal pension like a Self-Invested Personal Pension (SIPP), or a workplace pension via relief at source, then your contribution is taken from your pay after tax.
Providers will automatically claim the basic rate tax relief on your behalf, but the additional 20% or 25% needs to be reclaimed through self-assessment or by contacting HMRC directly if you don’t complete a self-assessment return.
The sooner you act here, the better. Claims must be made within four years of the end of the tax year in which the contributions were made.
If your workplace pension uses salary sacrifice or a net pay arrangement, then you should get the right amount of tax relief automatically so there’s nothing to reclaim.
Self-employed? Don’t overlook your pension
The self-employed generally have less in their pensions because they don’t benefit from being automatically enrolled into a pension by an employer. But they’re entitled to the same tax reliefs on personal pension contributions as employees.
If you work for yourself and you’re not paying into a pension, a SIPP is a straightforward way to start. You’ll be building a pot for later life while also reducing your income tax bill for 2025/26. Try not to let contributions flatline – contribute what you can and increase them as your earnings grow.
But remember, money in a pension can usually only be accessed from age 55 (rising to 57 in 2028). So make sure you’re happy locking away this cash for that long.
On a career break? Don’t stop pension contributions
Even if you’re not working and have no earnings, you can still contribute to a pension and benefit from tax relief. You can save up to £2,880 a year into a pension, which the government tops up to a maximum of £3,600 with basic rate tax relief of 20%.
Keeping pension savings going – particularly for people taking time off to care for loved ones – even at a modest level, can make a significant difference to your eventual retirement income.
You’re never too young for a pension
Nearly one in three wish they had started saving into pensions earlier. Younger workers might be tempted to opt out of their pension scheme, or only pay the minimum, but contributing as much as you can afford gives you the best chance of achieving your retirement goals.
The earlier you start, the more time your money has to grow, and the more time it has to benefit from compounding – where you earn returns on past returns, as well as the original sum invested. It means small amounts of money can grow into bigger amounts over time making it particularly beneficial for young pension investors.
You can even start a pension for a newborn with a Junior SIPP. This gives them the ultimate financial head start for retirement, with decades of potential growth, free from UK Income and Capital Gains Tax. The account must be opened and managed by a parent or guardian until the child turns 18.
You (or your friends and family) can contribute up to £2,880 a year into a Junior SIPP, which is topped up with 20% basic rate tax relief to a maximum of £3,600 by the government. It can be a great way of saving for a child or grandchild if their Junior ISA is maxed out for the tax year.
*Survey of 1,200 people conducted by Opinium on behalf of HL in October 2025.