The 2023-24 tax year ends on 5 April 2024.

Here’s some of the reasons you might consider saving more before the tax year is up. And a few top tips on how you can do it.

We can’t help decide what’s best for you, but the below information should make sure you have the information you need to make a decision.

Why you might want to save more:

Use up your Annual Allowance (AA)

The Annual Allowance (AA) is the limit on your pension savings that benefit from tax relief each year. It means the most you can save tax-free towards all your pension arrangements in a single tax year is the lower of either 100% of your earnings, or £60,000. Unless you’re affected by the Tapered Annual Allowance (TAA), or the Money Purchase Annual Allowance (MPAA).

When the new tax year starts, your Annual Allowance will renew. So, if you can afford to, you might think about paying more into your Electricity North West (ENW) pension now, to use up your remaining Annual Allowance before the new tax year.

If you’ve used your Annual Allowance for this tax year, you can carry forward any unused Annual Allowance from the previous 3 years. This may mean you can pay more into your pension, without having to pay an extra tax charge.  

To make the most of tax relief

A fantastic thing about saving with your ENW pension is that it is tax efficient, because the money you pay in is taken from your salary before tax is deducted. This means you pay less tax on your salary. 

For example, if you’re a basic-rate tax payer (who pays 20% income tax) and want to put £100 into your pension, it would actually only cost you £80. That’s because the other £20 comes from tax relief.

If you’re a higher-rate tax payer you’ll get 40% tax relief, and additional-rate tax payers get 45%. But there are limits on the amount of pension saving that benefit from tax relief each year. You can learn about the limits here.

To make use of any spare cash

If you’ve received a bonus, a monetary gift or if you have some cash to spare, why not consider doing a good thing for your future by paying it into your pension?

Hold onto your tax-free Personal Allowance

Your Personal Allowance is the amount of income you don’t have to pay tax on. The standard Personal Allowance for the 2023-24 tax year is £12,570.

Did you know, your Personal Allowance reduces by £1 for every £2 that your income is above £100,000. And, if you have an income of £125,140 or above, you do not get a Personal Allowance. You can learn more about this at Gov.uk. 

It’s handy to know the money you pay into your pension doesn’t count as an income. So, you might think about paying more into your pension to keep your Personal Allowance, and save more for your future.

Keep your child benefit if you’re a working parent

Child benefit can help you with the costs of your children. And, as the cost-of-living increases, every penny helps to meet the demands of busy family life. 

If you or your partner earn over £50,000 a year, you may have to pay the High Income Child Benefit Charge. And if you earn over £60,000, due to the tax charge, it’s likely you’ll end up with no extra money from Child Benefit. To see if this applies to you, try the government’s child benefit tax calculator.

Remember, the money you pay into your pension doesn’t count as an income. So to get your child benefit back, you might think about paying more money into your pension, and save more for your loved ones’ future at the same time.

Plus, you’ll automatically get National Insurance (NI) credits if you claim Child Benefit and your child is under 12. The amount of State Pension you’ll get is based on the amount of qualifying years on your NI record, so claiming your child benefit could help build up your qualifying years. 

How you can save more:

Saving more into your pension while you’re working could mean you have more money when you retire. Here’s a few ideas for how you can do it…

Check your State Pension and consider voluntary contributions

The full new State Pension for 2023-24 is currently £203.85 per week, that’s around £10,600 a year. But, if you have gaps in your NI record, it might mean you’re unable to get your full State Pension entitlement. You can check your NI record here.

If you have a shortfall in NI qualifying years, you may be able to build up your NI record by paying voluntary contributions, if you’re eligible.

There’s no time like the present to check if you’re eligible to pay voluntary contributions, as the deadline is 5 April each year. You can normally buy up to 6 years. But, until 5 April 2025, you may be able to buy any missing NI years from 2006 to 2016. You can learn more about gaps in your NI record, and making voluntary contributions here. 

Create some positive pension habits

There are other ways to maximise your pension savings, even if you can’t afford to pay more in at the moment. You could make some positive pension habits, such as:

• Making a regular note in your diary to log into your online account (DB members log in here, DC members log in here)
• Requesting a free estimate of your pension benefits
• Reviewing your investments, if you have them
• Taking financial guidance or advice