A concerning trend among UK workers in workplace pensions and long-term saving has been highlighted in recent research. Six in ten employees feel they are not saving enough for retirement, with a third experiencing anxiety when assessing the amount they have saved, the data shows.
IMPORTANCE OF KNOWING YOUR CONTRIBUTIONS
The level of contributions by workers and their employers significantly impacts the retirement lifestyle one can expect. Alarmingly, a fifth of those contributing to pensions need to be made aware of their exact monthly contributions. Encouragingly, two-fifths of workers contribute more than the standard amount, benefiting from employers matching pound for pound. Establishing a firm savings target and regularly monitoring pension savings is crucial for building a solid retirement fund.
STRATEGISING FOR A BETTER RETIREMENT
Reviewing your pension savings highlights areas where you might improve your contributions. For instance, a salary increase or bonus presents a perfect opportunity to boost your pension pot. It is essential to understand whether your current saving levels allow you to retire at your desired age, especially if it is earlier than the State Pension age. However, the research shows a significant gap in how often people check their savings. While some never review pension savings, the research shows others do so weekly, illustrating the importance of finding the right balance.
HARNESSING THE POWER OF REGULAR REVIEWS
Reviewing your pension annually or upon receiving a statement is a prudent approach. Surprisingly, a quarter of those who neglect to check their savings cite a lack of knowledge or lost login details as barriers. Though retirement may seem distant, maintaining control over your pension savings sets a solid foundation for future financial security. Regular reviews keep you informed, help reduce anxiety and clarify your retirement goals.
MAKING INFORMED DECISIONS EARLY
Starting your retirement savings early, ideally in your twenties, maximises the growth potential of your funds. While delaying contributions until you feel more financially secure might seem tempting, this could be a costly decision. Regular pension reviews, at least yearly, provide a clear picture of your savings’ performance. Adjustments may include choosing different funds, altering your investment risk profile or consolidating multiple pension pots for easier management.
MAXIMISING EMPLOYER CONTRIBUTIONS
Employer matching schemes are also valuable resources for increasing retirement savings. Allocating pay rises or bonuses to your pension can significantly enhance your financial future. When planning for retirement, consider not only when you wish to stop working but also how you will spend your time. This planning will help determine the financial resources needed to support your desired lifestyle.
LOOKING TO ACHIEVE A FINANCIALLY SECURE AND FULFILLING RETIREMENT?
Contact us today for tailored advice on pension savings and retirement planning. We’ll guide you through your options and ensure a financially secure and fulfilling retirement.
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