Importance of a retirement wealth check

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Are you ‘mid or late career’ or planning to retire within ten years? If the answer’s ‘yes’, then you probably want to know the answers to these questions: Will I be able to retire when I want to? Will I run out of money? How can I guarantee the kind of retirement I want? 

But, for many different reasons, planning for retirement is a commonly overlooked aspect of personal financial planning and this can often lead to anxiety as retirement approaches. We’ve provided some retirement wealth check ideas about how to boost your pension savings and help achieve your retirement goals sooner.

Should I review my pension contributions?

Sometimes the simplest solutions are the most effective. If you want to boost your retirement savings, the obvious solution is to increase your contributions. You may think you cannot afford to, but even a slight increase could make a big difference.

For those lucky enough to receive a pay rise in line with inflation every year, increasing your pension contributions by just 1% can add thousands to your eventual pension pot. The reason why a relatively small increase in pension contributions can result in such a large increase in the value of your pension pot is because of the power of compounding.

The earlier you invest your money, the more you benefit from the effects of compounding. Adding more money to your pension pot by increasing your contributions just makes the compounding effect even better.

What should I consider when reviewing my pension strategy?

A missed opportunity for many pension holders is failing to choose how their pension is invested. Some people leave this decision in the hands of their workplace or pension provider.

Firstly, you should know that you do not have to hold a pension with the provider your employer has chosen. You can ask them to pay into a different pension, allowing you to choose the provider while considering the type of funds they offer and the fees they charge.

Secondly, many pension providers will give you several options for investment strategies. If you are in the default option, you could achieve higher returns with a different strategy (though this will usually mean taking on more investment risk). This may not be appropriate in all circumstances, particularly if you are close to retirement.

Should I consider utilising my allowances?

As part of deciding when to retire, you should consider if you have utilised your available allowances, particularly Carry Forward availability and if your savings are within the Lifetime Allowance. You can read more about your allowances in our Annual Allowance and Lifetime Allowance article.

How can I trace any lost pensions?

Usually, starting a job with a new employer means starting a new pension. And, when that happens, some people may overlook the pension they had with their last employer. As a result, many people have pensions with previous employers that they’ve lost track of – and rediscovering them can give a huge boost to your retirement savings.

You can trace old pensions by getting in touch with the provider. Look through any documentation you still have from your past employers to see if you can find your pension or policy number. If you cannot, you can contact the provider anyway and they should be able to find your pension by using other details, such as your date of birth and National Insurance number.

If you are not sure who the provider is, start by asking your previous employer.