Last month was Talk Money Week and the theme of this year is “start the conversation.” In this blog, we have six top tips to help you get your pension savings back on track.
- Make sure you’re enrolled into your workplace pension
You’re usually not the only one contributing to your retirement – in most cases the government (in the form of tax relief) and your employer do as well. It’s essentially free money.
- Pay in the maximum you can afford
Although current auto enrolment minimum contributions are set at 8% of qualifying earnings (3% of which must be from your employer) you can pay in more than the minimum 5% and some employers will match contributions to a certain level. Depending on your individual circumstances, you might want to contribute as much as you can to make the most of your employer’s contributions. The more you put in, the more opportunity your money has to grow and the more you could get out at the end, depending on investment returns.
- Don’t delay – it’s never too late to start saving into a pension
The longer you contribute to a pension, the more money you could save and the more you could benefit over the long-term in terms of growth.
- If you start a family, don’t stop saving
While a child will of course put additional strain on your finances, it’s also important to think about the long term and keep up your savings if you can. If you continue paying in whilst on maternity leave, you’ll be benefitting from your employer’s contributions and growing your pension while not even working.
- Review your pension savings regularly
Make sure you log in to your pension scheme portal and check your pension pot regularly – just like you would your savings account. That will help you stay on track for the best possible lifestyle in the future.
- Find your lost pensions
Lastly, it’s worth considering if you have any lost pensions that you may not know about
There’s over £31 billion in lost pensions in the UK. On average, people will have 11 jobs throughout their career which might mean that you could have 11 pension pots by the time you reach your retirement age. It is straightforward to track your down any old pensions.
We all have that ‘drawer of shame’ in the kitchen; the one where we put all our important paperwork and bank statements and hide it away for a rainy day. Step one would be to go through old paperwork to find the name of your old pension provider and email them to find out more about your savings. Even better, try the government’s free Pension Tracing Service. Then you need to contact the company you used to work for to track down a lost workplace pension.
One thing to keep in mind, if you do have old pensions that you’re not paying into, watch out for charges you may still be paying for them. Bringing old pensions into your current pension could save you money, as you’ll only have one “set” of charges, depending on the charges of the other pension pots.
