Do you have a plan for retirement? Are you one of the lucky seven percent of people over the age of 50 who feels prepared?
An article published by Pensions Age talks about research carried out by the Money and Pensions Service (MaPS) (The research was conducted by Research Without Borders for the Money and Pensions Service. A nationally representative survey of 2,001 UK adults aged 50-70 was conducted from 28th – 31st August 2020.) which revealed that over 37% of workers will leave planning their retirement until two years before or not at all.
That’s the equivalent of 3 million workers who leave their retirement plans hanging in the balance!
Your pension is a big part of your retirement plan
When you should you plan for retirement, then? Well, if you’re employed as soon as you’re enrolled into a pension, you started contributing towards your retirement, regardless of how far away that is or was. It takes the best part of a lifetime to make sure you have enough to live on in your later years, along with regular reviews of your pension to make sure everything is kept in order and you’re getting the best projected return.
Sure, 50 might be the age to think about how to spend your retirement funds, but it’s a good idea to start thinking about how you’re going to accumulate those funds as early as possible for the best chance at a positive financial outcome in retirement.
Why you should start planning early on
After all, who knows what can happen in a lifetime? According to the same research carried out by MaPS, nearly 18% of people have decided to delay accessing their pension, while 14% are accessing it sooner to aid their day-to-day finances or to help a relative or friend. It’s worth remembering too that you can take only benefits from most pension plans when you’re 55, with this rising to 57 in 2028, and it’s always a good idea to seek independent financial advice beforehand.
Over fifty percent of retirees (up to the age of 70) have stated that they would encourage the ‘Gen X’ generation to start planning towards their retirement finances earlier.
The earlier the better. You can speak to an Independent Financial Advisor to go through your pension or you can seek guidance from places like Pension Wise, to speak to somebody about making sure you’re putting away money each month towards a retirement fund. We typically tend to think of these things during milestones in life. Marriage, children, buying a home. With the introduction of auto-enrolment, it’s important to make sure you’re focussing on saving for retirement as soon as you start to contribute to your pension.
If you’ve accumulated multiple pensions over the years
Talk to an Independent Financial Adviser or visit sites like www.pensionwise.gov.uk to find out whether you should look at bringing it all under one plan, or whether it’s worth splitting some into different investment options. It’s not unusual nowadays to accumulate different pensions from different employers. Sometimes these can be really small amounts in the grand scheme of things, and over the years, they can be forgotten about altogether.
Are you on top of your pension contributions? Do you know how many pension schemes you have and what kind of funds they are invested in? If not, it’s sensible to find out.
Finding somebody to talk to about your plans for retirement can seem like a daunting task, but the reality is, any trained professional will have plenty of experience in this area and will be able to guide you through the process. Too many of us avoid tackling these important tasks because we’re not sure we understand exactly what we’re supposed to be doing about it in the first place, but that’s not a good enough reason to let it fester – especially not until two years before you retire!
Whether you seek free guidance and advice or prefer to seek independent financial advice, this tends to lead naturally onto other topics which involve your finances, so it’s important you get along well and feel comfortable with the person you’re speaking with. Ultimately, you’re making important financial decisions and commitments to your future, so it pays to make sure you’re working through that with somebody you feel is ‘on the same page’ as you are.
Have you reviewed your pension or pensions, and do you know what you’re going to be entitled to when you’re no longer working? Will it be enough to cover your lifestyle and financial commitments like property maintenance or rent/mortgage payments?
If not, don’t panic. Set aside some time for yourself to back over your pension contributions and dig out any paperwork you have. As I’ve already mentioned, there are plenty of ways for you to be able to seek advice on the best way forward, as well as how you can make sure you have a robust retirement plan in place.
Not sure whether you’ve got a pension?
If you’re employed your HR department can usually help or point you in the right direction if you’re unsure whether you have a workplace pension. If you need to find out about previous pension(s) or you’ve spent some time being self-employed, contributing to a private pension, it can feel like a wild goose chase trying to figure out what you actually have.
You can use services like the Pensions Tracing service provided by the .GOV website which will tell you whether you have a pension or what value it is. You need the name of your employer or your pension provider to be able to carry out the search.
Still stuck? Talk to an Independent Financial Adviser about your situation and they will be able to work through everything on your behalf before suggesting which ongoing options are available to you.
Start planning for retirement now
In conclusion, it’s never too early to start planning for your retirement. After all, it could be the difference between having comfortable retirement or having to work just to get by.
Review your retirement plans annually to see how things are getting on and to make sure everything is on the right track. It might seem unnecessary, but regulations and legislation change over time, we’ve seen that with the increase in retirement age – so it’s important to keep yourself up to date with everything that’s happening on a yearly basis.
By putting your efforts in now, it means you can start to plan what your retirement will look like knowing you have a pretty sum ready to access when you retire.
If you want to find out more and discuss your retirement plans in more detail, you can contact me and I’ll get back to you soon.