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Pensions expert Andrew Megson has some advice for workers approaching retirement in a turbulent landscape.
Each new year brings a clean slate: a chance to set about achieving our goals and ambitions with a renewed sense of positivity. And while 2021 has gotten off to a shaky start – thanks to another surge in Covid cases prompting a third national lockdown – there are still plenty of opportunities to make a positive change.
Indeed, for individuals approaching retirement, January is the prime time for creating some pension resolutions. Whether it’s resolving to tracking down old pension pots from previous employers, or changing pension providers altogether, there are plenty of things savers can do to ensure a financially secure retirement.
With this in mind, here are some of my top resolutions to consider in the new year:
Naturally, as we lead such busy lives, sometimes it can be easy to get distracted from focusing on our pension contributions. So, it is incredibly beneficial to make the savings process as simple as possible.
For those who have workplace pensions, this shouldn’t cause too much trouble. After all, this scheme simply entails one’s employer deducting an agreed pension contribution from an employee’s salary each month.
However, for those with a personal pension, contributions might require some more careful thought. So, to replicate the effortlessness of a workplace pension, individuals should calculate how much they want to contribute each month and set up a direct debit. In this way, savers should be able to build up their pension pot without any hassle.
It might seem a little obvious to mention, but ensuring developing a suitable retirement strategy is a vital. Worryingly, it’s importance is often overlooked, with recent research commissioned by My Pension Expert, revealing that 42% do not have clear retirement strategy in place.
That said, it is never too late to create a retirement strategy, and if savers are struggling to go it alone, help is always on hand in the form of independent financial advice. A licensed professional will be able to take into account all aspects of an individual’s financial situation to develop a made-to-measure retirement strategy, whatever your requirements.
These days, it’s typical for most people to have worked for many different employers throughout the course of their careers. And often, with each new career opportunity comes another workplace pension scheme – and after a while, it can be easy to lose track.
Perhaps unsurprisingly, almost a third (31%) of UK adults aged 40 to 54 have lost track of their any pension pots, according to a survey from My Pension Expert. But thankfully, there are ways to recover these – for example, the Government offers a useful tracking tool to help savers recover their pension pots.
Although the service cannot currently provide users with the exact amount they have amassed, they do provide individuals with the contact details for their various providers.
Just as savers search the market for better deals on utilities, credit card and loan, or insurance, so too should they shop around for pension providers. Naturally, each provider and plan will have different benefits. So, rather than stick with a provider that doesn’t best suit their specific needs, it would be wise for Brits to investigate all of the options at hand.
Usefully, it is possible to transfer providers at any age, so there is no need to put of researching until after the age of 55.
Although, it should be noted that some providers impose charges on clients that choose to switch. So, those thinking of making the move should read the small print and seek financial advice where necessary.
The pension sector is constantly changing, and understandably, this can be confusing. Indeed, with touted changes to pension policies, tax relief, the triple lock system, and even the potentiality of negative interest rates, things look set to become even more complex.
That’s why savers should make keeping up to date with the latest pension news part of their new year’s resolutions. Tracking current affairs and keeping an eye on any changes to pension policies might enable savers to make vital changes to their retirement strategies and keep their pension pots in good health. This isn’t always a simple task, though, so savers should remember that financial advice is always on hand should they need any help cutting through the jargon.
Admittedly, we haven’t exactly had the smoothest transition into the new year, and things are likely to be difficult for some time yet. But now is the best time for workers to strengthen their financial situation and get into good habits with pension savings. Doing so will prove to be a positive step forward in securing a financially secure retirement.
*Andrew Megson is the Executive Chairman of My Pension Expert, the UK’s number one Advised Retirement Income Specialist. Founded in 2010, My Pension Expert specialises in providing independent advice to UK consumers about their pension plans – it arranges millions of pounds worth of retirement income options each week.