4 ways to boost your retirement savings in 2026

Retirement Teachers Teachers Pension Scheme Pre-retirement

Why is now the right time to reset your savings habits?

Many of us will use the start of the year as a natural time to reset. This goes for your finances too.

While it can be tempting to wait for the new tax year to begin, making changes ahead of time can really pay off in the long term.

1. Start by reviewing your everyday finances

When was the last time you looked through your bank statement? Did you recognise all the payments going out? Do you still use everything you’re paying for?

If there are payments for a gym you no longer use or a streaming service you barely watch, it may be time to cancel them.

If you have bills that have increased for things like your mobile phone or your home insurance, shop around to find out if you could be paying less. Small savings like this, little and often can really mount up. They could even be redirected into a private pension, to give your retirement savings a welcome boost.

Many teachers across the UK and Scotland will have recently had or will soon have a pay rise.

Before you get used to having that money in your account, think about whether you really need to spend it now. This additional income could be an ideal way to boost cash savings to keep you secure in the short term.

Alternatively, you could start or increase longer‑term savings or investments. This could include a personal pension to help build a stronger foundation for retirement.

2. Make the most of tax efficiencies

If you’re looking for a way to boost your funds for retirement while saving on tax, it may be worth considering putting more into a tax efficient investment, such as an ISA or a pension. Pensions can be particularly effective if your take home pay is close to reaching the next higher tax bracket. That’s because you can currently put up to £60,000 tax-free into your workplace pension options.

Lots of people choose to sacrifice some of their income to top up their pension. There are many routes available to a teacher - for example, an AVC or a personal pension. Each has their own benefits, so it’s important that you investigate which one is right for your own needs and objectives.

The Teachers’ Pension Scheme (TPS) and the Local Government Pension Scheme (LGPS) are both defined benefit schemes. This means they provide a set, guaranteed income in retirement. Whereas AVCs and personal pension schemes are defined contribution schemes where your money is invested over time to provide access to income in retirement based on your needs

As an AVC is a separate part of your Teachers’ Pension Scheme, the tax benefits of contributing to it are much the same. That’s because your AVC contributions will also be taken straight from your salary. So, you’re effectively reducing the take home pay that you get taxed on. If you choose to pay into a private pension instead, you'll get tax relief on your contributions. Either way, you'll be building an additional pot to your TPS.

You can choose exactly how much you want to contribute to an AVC or personal pension and when to start or stop payments. There is no minimum contribution rate.

So, if you know your pay may increase due to a backdated salary increase, it may be worth considering adding this to an AVC or private pension to reap the rewards in retirement.

Keep in mind that the value of your investment can go down as well as up, so you could get back less than you invested.

Tax treatment depends on your individual circumstances and may be subject to change in future.

3. Broaden your savings and investment options

If you’re already saving regularly, it can be worth thinking about how those savings are structured.

Alongside pensions, there are other ways to save for your retirement that can provide diversity. One example is ISAs, another tax efficient way to save. ISAs come in several forms, most notably stocks and shares or cash.

For money you’re putting aside for the longer term, holding everything in a cash ISA may not always offer the growth potential you’re looking for.

From 2027, the cash ISA allowance will also reduce to £8,000 of the overall £20,000 ISA limit, which means it’s a good moment to review how you use the rest of your allowance.

A stocks & shares ISA is one route that allows your savings to be invested rather than held in cash. As with any investment, the value can rise and fall, but it can offer the potential for long‑term growth and help diversify how you save for the future.

If you’re aged between 18 and 39, you may want to also consider opening a Lifetime ISA (LISA) while they’re still available. A LISA allows you to save up to £4,000 each year as part of your £20,000 ISA allowance, with a 25% government bonus added to what you put in. However, the bonus can only be used to buy your first home or at age 60 for retirement.

There are also other investment options to explore, depending on your goals and comfort with risk. Taking time to understand the choices available can help you build a mix of savings and investments that supports your retirement plans.

4. Stay informed about upcoming changes

While this isn’t a way to boost your savings for retirement, staying informed about upcoming changes will help you with planning.

Pension rules don’t stand still for long, and the changes planned over the next few years mean it’s worth keeping an eye on what’s coming.

For example, the rules around tax relief and pension allowances are set to change in April 2029. While that may feel a long way off, understanding the direction of travel now can help you make decisions with more clarity. It also means you’re less likely to be caught out by shifts in thresholds, allowances, or contribution rules.

As a member of the Retirement Club you’ll already be receiving regular updates. The Teachers’ Pension Scheme will also send regular emails about their scheme. These updates can be a helpful way to stay in the loop without having to search for information yourself.

Small steps today, stronger retirement tomorrow

You’ve already invested so much in others through your teaching career. Now is the time to invest in your own future to get the retirement you want.

These small steps now can help you to plan, save and invest to keep your retirement goals on track.