Over the last fifty years, expectations for retirement have changed immensely. It is no longer that “tagged-on” period at the end of our lives where opportunities are bleak and you just learn to get by. In the 21st century, thanks to advances in medicine, communications and technology and robust pension plans it can now be a period you really look forward to in life.
So how can you make sure that your pension is on track for your dream retirement? Here are our top ten tips:
Start Early
This is pretty obvious, but the earlier you start, the greater time it will have to grow. Often when you are just beginning to receive wages, the idea of retirement is probably not going to be a particularly exciting subject, but prepare for the third phase in your life like you would a holiday. Get organised and reap the rewards!
Visualise your retirement
In order to get an idea as to how much money you would need in retirement, try to visualise how you want it to look. Aspirations and needs will change throughout your life, but the ideas will be the springboard that encapsulates your retirement needs.
Should I opt out of my employer’s pension scheme?
In 2012 the government introduced a legislation making it law that if you are earning more than £10,000 a year and aged over 22 you will automatically be opted into your employer’s pension scheme. This scheme comes with a major benefit: Your employer will contribute a minimum of 3% of your salary on top of any contribution you make. So think twice before letting it go.
Understand the benefits of your scheme
At the same time, do not take the “standard” of a pension you are opting into – or any pension scheme for granted. Understand the benefits you will receive as well as overall performance. For instance, the freedom to access your pension at 55 is not available on all schemes.
Get expert advice where needed
For the majority of people, the world of pensions can seem pretty complex. A regulated financial advisor can review your pension as well as guiding you through your pension options, such as the pension freedoms.
Keep an eye on your pension performance throughout your career
Your pension savings are invested by the pension provider. As with all investments, your pension performance is likely go to up and down depending on how robust it is, the degree of risk and changes in the financial environment. If you keep an eye on performance, you can make changes before you run the risk of losing money.
Check your State Pension
You only receive maximum State Pension if you have paid your national insurance regularly for 35 years. Your state pension can be a fundamental and invaluable addition to your pension fund so check out what you will receive. You can add voluntary payments if you want to by clicking here.
Changes in lifestyle
Changes in your lifestyle may affect how you view your retirement needs. Changes in state regulations or the financial market can affect your pension performance – so as stated above keep all these issues front of mind when assessing the strength of your pension scheme.
Contributions
The size of your contributions will be a major factor determining the size of your pension. However, that amount can just become habitual (especially when it is removed automatically before you receive your salary in an opted-in pension) if you do not pay attention to it on a regular basis.
Get to know your advisor
Your regulated financial advisor can be a great guide and partner throughout the life of your pension. They will get to understand your changing needs and aspirations and match it with knowledge of your individual pension along with the state of the pension market.
If you are thinking about your pension, consider using a regulated pensions specialist such as Portafina or, view the guidance at Pension Wise.