Pension Awareness Day acts as a great reminder to review your pensions and make sure you’re getting the most out of them
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Pension Awareness Day is on the 15th September and has been since 2014. It works as a great reminder to review your pensions and make sure you’re getting the most out of them.
Find your “lost” pensions
It’s easy to lose track of all the pensions you’ve had over the years. Moving jobs a number of times during your career could result in you misplacing a pension somewhere along the way, especially if you have moved house and forgotten to tell your pension provider (we’ve all been there!).
The Government’s pension tracing service can help you track down any lost pensions.
Consolidate your pots
After finding any lost pension pots, consider consolidating them. It makes it easier to keep track of your retirement savings and can reduce fees. You may also achieve better growth by combining all your pots – there is, however, no guarantee to this! If you’re not sure, it’s definitely worth speaking with an adviser.
Check your pension amount
Once you’ve found all your pensions and consolidated the ones you want, it’s time to check to see just how much you’ve got.
It may sound obvious but being able to see how your pots are growing can help keep you motivated. It also helps you see if you’re on track to achieve the pot size you want.
Check your fund’s overall performance
Your pension is a long term investment so assessing the overall trend of your fund is far more important than focussing on how the value of your pension has changed in the last month or even last year.
There will be short term volatility depending in the marketplace so it’s essential to look at the overarching performance.
Understand how your pension is invested
We’ve all seen the calls to be more pension savvy, but it really is important to have a basic understanding of how your pension is invested.
In general, the higher the risk of an investment, the higher its potential return. However, high risk investments also increase the potential to lose some of your money.
On the flip side, low risk investments may mean you’re less likely to lose money, but also that growth potential is lower.
Default funds are often deemed as lower risk. But, depending on your circumstances, such as time until retirement and your attitude toward risk, you may be wise to research other fund options: even a small change could significantly increase the size of your pension pot.
It is important to remember that the value of investments can go down as well as up.
Check your retirement date
Unless you specify your retirement date, your pension provider will set the date for you.
Not only will this date be used for pension forecasting, it may also be used in the providers’ decision making process surrounding exactly how your pension is invested. Some providers start to reduce the level of risk as you get nearer to your retirement date.
Make sure the assumption your provider has made is accurate and that their approach to risk fits with your long term plans, as it could affect your pension’s performance.
If you’d like to me review your pension and make sure you’re on track for the retirement you want, please do get in touch.
By Daren Wallbank
THE VALUE OF PENSIONS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU INVESTED.
TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.
Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 29/08/2023
