We are in the paper - Pension savings: tips for how to keep yours on track...

A simple pension “health check” will help keep you on track for retirement.

A simple pension “health check” will help keep you on track for retirement.

Firstly, don’t dismiss the state pension – find out how much you are likely to receive at www.gov.uk/check-state-pension.

If you are not entitled to the full new state pension (currently £164.35 p.w.), it is probably due to a gap in your national insurance contributions. Find out if you can make voluntary contributions to increase your state pension.

Now for your pensions; perhaps from previous employment or pensions that you have started yourself. Ensure you
have details of ALL the pensions you believe you are entitled to as it’s not uncommon to “lose” a pension if you have changed employment or moved house a few times. You can trace “lost” pensions at www.gov.uk/find-pension-contact-details.

Finally, establish what type of pensions you have. Defined benefit schemes (often called Final Salary) provide you with a guaranteed income in retirement. Whereas the income you receive from a defined contribution pension (often called personal pensions) depends on various factors; contributions, performance, charges and the choices you make in retirement. Your eventual income may also depend upon the size of the fund at retirement, future interest rates and tax legislation.

With a clear picture of the planning you have done so far, you will have a better idea of whether you are on track – and what to do to improve your position.

Steps to take

Increasing your pension contributions even by a small amount, will make a difference to your pension over time. An increase of £100 per month is £1,200 per annum and £24,000 over 20 years. This increase will also be subject to investment growth.

Two other factors that can potentially boost your retirement income are also important: lower charges or improved investment performance.

By reviewing the charges and performance of your pensions on a regular basis, you will ensure you are getting the best deal for your needs and circumstances. You could also consider consolidating your pensions, so you only pay one set of charges.

These may sound like simple steps, but they are crucial to sensible financial planning. By reviewing your pensions regularly – with the help of an independent financial adviser if necessary – you will substantially improve your chances of securing the best-possible retirement income.

To raise awareness of the benefits of financial advice, True Financial Design Ltd offer a FREE INITIAL meeting to help you plan your future.


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