Retirement may seem like a long way off but it will soon come around! Pensioners have recently received an increase in their pensions. The updated full state pension is applicable to men born on or after 6 April 1951 and women born on or after 6 April 1953, currently standing at £221.20 per week – equivalent to £11,502.40 annually.
However, with this fixed amount, can pensioners truly sustain a comfortable lifestyle?
Consider the myriad of expenses – from utility bills and groceries to transportation and personal care. What about leisure activities like holidays, dining out, or celebrating special occasions such as birthdays?
Let’s delve into why having a private pension is the best way to lead a fulfilling life in retirement.
Private pensions create more options in retirement
A private pension is the best way to save for retirement and enjoy those remaining work free years!
If you are an employee you would have been auto enrolled into your company scheme so check how you can benefit by adding more money to the contribution your employer pays, every scheme is different.
If you are self employed you’ll want to keep your tax bill to a minimum. Regularly contributing to a pension is a way of helping you do that. Unlike savings accounts and ISAs, the government gives you tax relief on the money you pay into your pension.
Review your pension regularly
Once you have been paying into your pension for some time, it is important to review how it is performing on a regular basis. That way you can ensure you are on track for your retirement plans.
It is easy to set up your pension scheme and then forget about it.
The fact is, you may change your appetite for risk as you get older, have more or less money to invest, or your funds may be underperforming.
That is why it is essential that you review your pension pot at least annually.
This is even more important if you have several pension funds.
Make note of all your pension schemes so you can calculate your total pot.
Furthermore, you have the opportunity to review integrating your pensions into one fund for convenience, ease of tracking and increased performance. It is important to note that you should check the terms and conditions of the various schemes to ensure you do not lose out on any benefits from different providers.
Questions to ask when reviewing your pension
• Have your retirement goals changed? If so, do you need to increase your contributions, increase your retirement age or move to a higher performing fund?
• Are you prepared to take more risk to enjoy potentially higher returns? If so, you may wish to move your investments.
• Do you want to reduce your risk as you get closer to retirement?
• Have you changed employers or become self-employed?
If so, get the right advice about starting your own personal pension scheme or whether to move your existing pensions into your new employer’s fund.
Get advice on your pension It is well worth getting a financial advisor to help you review your pensions and make the right investment decisions. Advisors from the pension companies cannot give you advice themselves; they can only answer your factual questions.
If you are interested in finding out more about your pension pot, the Money Helper pension calculator is a good place to review your current situation.
You can also check at what age you will be able to receive your state pension via the UK government website.
Investing in a pension is essential to leading a happy and prosperous retirement. It may seem like years away but time passes very quickly.
So please – if you don’t have a pension, start one now.
And if you do, have you reviewed it lately?
Where are you currently?
You can also check your UK state pension forecast here:
Lost pensions
If you have pensions you have lost the details for you can check the Pension Tracing Service which is a free government service. It searches a database of more than 200,000 workplace and personal pension schemes to try to find the contact details you need.
You can phone the Pension Tracing Service on 0800 731 0193 or click here
Need more help?
Contact me for advice and support to set up a pension or review your financial future. I am an award winning financial planner and author of the book ‘She Can Prosper’.
You can read more here on creating a great financial future.
Email : Diane Watson – diane.watson@sjpp.co.uk
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