No matter how near or far retirement is, it’s really important you keep on top of your retirement savings. Most working people in the UK aren’t saving enough for retirement and don’t realise the State Pension isn’t enough for a minimum lifestyle.
So, what can you do?
You need to find ways and opportunities to top up your pension whenever you can, contribute as much as you can afford and make sure you’re invested in the right strategy for your circumstances.
Step one is knowing what kind of retirement you’re aiming for and how much that will cost. Have a look at the Retirement Living Standards' suggested retirement lifestyles and how much they cost.
Step two is checking if you’re going to reach that goal, and working out what you can do to get there. Look through your annual pension statement, use the retirement planner and check what State Pension you are likely to receive.
Remember:
- Don’t miss out on benefits. If you can save into your workplace pension scheme, you will likely benefit from your employer also contributing and tax benefits. With these top ups of money, your savings have a better opportunity to grow. If you're not sure how it works, see our Why save for the future page to find out more.
- Consider what other sources of income you might get. Maybe you have a side business, or get rental income?
Check your Target Retirement Age. You might be planning to work longer, which can make a big difference to how much money you build up. You can change it online in your Pension Account any time, but remember that it affects your investments if you’re in a lifestyle fund.
Even a little extra can add up, and with tax relief it can cost less than you might think. You can get an estimate of the impact of changing your Target Retirement Age and your contributions, by using our planning tools.
The government limits how much tax-relievable contributions you can make into a pension each year. This limit won’t affect most people, but it’s worth keeping an eye on it - the Government website is the best place for the latest limits and clear guidance.
Charges can vary significantly between pension schemes. Combining your pensions can make managing your money easier, and minimise your charges. You can read more in our transfer section to get an idea if it’s the right option for you.
You can see your investments on your annual statement and your online Pension Account, and you can read more about investing here.
Lifestyle funds (including the default choice) change your investments automatically, the closer you get to your Target Retirement Age. This can protect your savings from sudden sharp drops, and you don’t need to do anything yourself to move the money. But it also means that your investments are less likely to go up a lot just before you retire.
It is a good idea to revisit your investment choice and Target Retirement Age as your personal circumstances, attitude to risk and the financial conditions change. You may want to consider taking financial advice to help with your investment decisions.
- Use the retirement planner to see what changes you might need to make
- Check old pensions to see if it sensible to transfer them into the Trust
- Use the risk quiz to check your investments align with your attitude to risk
- Check all your personal details are correct
- Check your Target Retirement Age
- Check your Nomination of Beneficiaries is up to date