Britons could boost their retirement savings by thousands of pounds if they choose to give themselves an annual Christmas contribution bonus, according to new analysis.
Statista predicts that average spending per person during the 2024 Christmas period will reach £796 across the UK, ranging from £698 in the North East to £977 in London.
Research by PensionBee reveals that redirecting just a quarter (£200) of this expected spending into a pension as an additional contribution could add between £305 and £521 to a pension pot, depending on how far the saver is from retirement.
Saving half of the predicted amount (£400) could increase the pot by £608 to £1,039.
If this became an annual habit, the long-term impact could be substantial. A 25-year-old making a yearly £200 Christmas contribution could amass an additional £16,483 by retirement, while a £400 contribution each year could lead to an extra £32,970.
For those nearing retirement, an annual £200 contribution could still add £3,528 to their fund, or £7,056 with £400 contributions.
Becky O’Connor, director of public affairs at PensionBee, commented: “With Christmas just around the corner, it’s a great time for savers to reflect on their festive spending habits and consider whether some of that money could be redirected into their pension.
“Even contributing a small amount can see savers benefit hugely from the power of compounding interest and tax incentives from the government, significantly boosting retirement savings over time.
“Adding a lump-sum ‘Christmas contribution bonus’ into your pension is straightforward, and your future self will thank you for it.”
This comes as rising living costs push more retirees to seek post-retirement work, with searches for such jobs in the UK increasing by 16% over the past year, according to new research by Almond Financial.
The analysis reveals sharp regional differences, with southern cities like Oxford experiencing a 900% surge in job-seeking pensioners, likely due to its high cost of living.
Commenting on the trend, Sam Robinson, principal financial adviser at Almond Financial, noted: “The findings are concerning as those who have spent their lives working towards retirement are finding it increasingly essential to find work in later years, as their planned savings aren’t providing enough support for the cost of retirement living today.
“While the cost of retirement living will vary from person to person, this study will certainly be eye-opening for those building their pension pot, who may not be saving enough to live the retirement lifestyle they want without the need to pick up a post-retirement job.
“For those looking to boost their retirement income, there are many ways to do this and speaking with a financial or pension advisor will allow you to lay all of your options on the table and decide what is most suitable for you.”
