Whether it's saving for a long awaited summer holiday, home improvement or a new car, most of us have an idea of how much our latest purchase will cost and in reality how much our budget will stretch. However, our careful planning and preparation doesn't always translate to some of the most important decisions we will make, our pensions being a prime example!
According to research by Duncan Lawrie Private Bank, out of the 2059 UK adults surveys, most people who have contributed to a private pension had not reviewed its performance in the last three years, with almost 40% failing to review their pension plans at all.
In order to comfortably cover bills, living costs and a have disposable income left over, a pensioner will need a yearly income of £15,000 - £20,000 from their pension pot, according to the state-backed pension provider NEST (National Employment Savings Trust). However, all too often, people reach retirement and are shocked by how little their pension pot has progressed. With many unable to afford the retirement lifestyle they had come to expect.
If the countdown to your retirement has started ticking, take a look at our top tips below to help you get the most out of your pension pot.
- Track your lost pensions:
According to the research by Duncan Lawrie Private Bank, 9% of people in the UK do not know how many pensions they currently have. With so many of us having several jobs over our working lives, it is likely that we have a number of pension pots in a variety of different places. It is important to find the paperwork for each pension, taking your time to review you career history to check that you are not missing any.
- Get on top of your pension plans:
If you have accumulated a number of pensions, which date back several years, it is likely that you have not reviewed their performance recently. Some older pensions have much higher charging structures associated with them, compared to some current pensions. This means that over the years, the value of your pension could have been slowly eroded. It is a good idea to speak to a financial adviser who can provide you with an overview of where your pension is being invested and if charges are significantly impacting on the value. It is also important to get a State Pension forecast, which will show you how many qualifying years you currently have on your NI record. State Pension rules are changing for people who reach State Pension age on or after 6th April 2016. For more information, click here.
- Breathe new life into your retirement plan:
With significant changes proposed to shake up the UK pensions industry, speaking to a financial adviser has become even more important than ever before. If you have several plans that you are looking to tidy up, you are considering alternative investment vehicles or need help tracking your lost pensions, attend a FREE retirement review at Retirement and Investment Solutions.
- Think outside the box:
The proposed pension changes planned for April 2015 will give UK pensioners more freedom with retirement savings, but what options are available once you have access to your savings? If your total pension fund value and your projected income of your combined pensions will not provide you with the income you need in retirement, you may want to help boost your pension pot by considering alternative investment avenues. Not all investment opportunities work for everyone; we have a long and successful history managing profitable investment portfolios for over 50s, tailoring our advice and recommendations to personal circumstances.
- Enjoy your retirement stress-free:
After reviewing your retirement savings and making the necessary changes to your pension plans, it is time to sit back, relax and enjoy your hard-earned cash during your retirement.