Pensions: Three ‘key’ steps to getting ‘the retirement you deserve’

Pensions and savings: Interactive Investor expert gives her advice

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info spoke to Mr Pollard, co founder of Cushon, about what type of things people can be doing to ensure their finances are in place before they retire and how to organise their private pensions. The first thing people can do is check that their pensions are on track.

He said: “Whatever your plans are for later life, you’re going to want to make sure you have enough money to support yourself and this means keeping an eye on your pension pots.

“It’s the key to the eventual retirement you deserve. Whether you can access your pension in real time via a mobile app or need to wait for your annual statement to arrive, take a good look at the projected value of your pension pot and make sure it’s going to be enough.”

If Britons are worried about whether they have enough saved for the retirement they want, Mr Pollard suggested people can look at the Pension and Lifetime Association’s Retirement Living Standards.

This can give people an indication if they are on track and how comfortably they may be able to live.

If people don’t think they have enough saved for the retirement they want, he suggested that people can look at increasing their contributions.

He said: “Even a small increase can make a big difference down the line. And as you increase the amount you’re saving, you’re in for some free money too.

“If you’ve got a private pension, you’re going to get some additional money from the Government in the form of tax relief.

“For most of us, that means for every pound we pay in we’re actually getting £1.25 invested. That’s extra money that can really boost your future pension pot.

“And if you’re in your company’s auto-enrolment pension scheme, your employer has to contribute too and might pay more into your pension if you do. Just check with your HR department.

“The bottom line is, a small contribution increase today can make a big difference to your plans for the future.”

Secondly, Britons approaching retirement should keep track of any old pensions and keep them up to date, he explained.

Gone are the days when people had one job their whole lives. Now people are increasingly moving jobs or changing careers and as a result people can build up many different pension pots over their lifetime.

As people start to get closer to retirement, it’s important to take stock of all pensions so they know what they have saved.

If people have moved house and forgotten to update their address, it’s easy to lose track of a pension and so keeping personal details up to date is really important so pension providers don’t lose track of someone.

Mr Pollard reminded people to not forget about their nominated beneficiaries.

He continued: “The older your pension is, the more likely it is that you haven’t kept your beneficiaries up to date. Maybe since you left a previous employer or since taking out your latest pension, your personal circumstances have changed but your nominated beneficiaries haven’t.

“It’s really important that you review these to make sure that in the worst case scenario, the people you love are going to be looked after.

“If you’re not sure you’ve got a handle on all your old pensions, make use of the Pensions Tracking Service. It’s a free Government service that can help track down any previous pension pots you might have forgotten about.

“But the best way of not losing track of your pensions is to download your pension provider’s app or register for online services – even if you move house, you’ll always be in touch with your pension.”

Lastly, Britons should also consider getting all their pensions together under one roof.

Trying to keep track of old pensions and making sure they’re all still doing what they should be can be difficult and so if people do have several different pension pots, they might want to consider consolidating them into one.

Mr Pollard added: “This will make it easier when you come to draw your pension as you’re only drawing it from one place. It could also mean you could get more value from your pension in the years leading up to retirement, moving out of any schemes with higher annual management charges.

“Just be sure to check how these charges differ between your pensions first and if there are any exit fees to move your money. A regulated financial adviser can help you make this decision.”

Mr Pollard warned Britons to check their retirement age as it is a bit of a “red herring” in that people don’t have to physically retire at a specific age.

A more accurate description he gave would probably be “access age”. This is the age when people can expect to start taking money out of their pension which at the moment can be anything from age 55 increasing to 57 from 2028.

He concluded: “Despite this reality, when you take out a pension, you’re usually asked by your pension provider to specify a retirement age upfront – most people default to age 60 or 65 without giving it too much thought and most never review or change it.

“But the retirement age you specify can affect your investments as you get closer to retirement and so it’s important to review this and check it’s still in line with your future plans. “

Source: Read Full Article