You may be carefully putting some cash aside for your retirement, but how confident are you that the pot you’re building will give you the sort of lifestyle you want? A survey by the Pensions and Lifetime Savings Association has found four in five people do not feel confident that they’re putting enough aside for later life.
This equates to some 30.4 million working-age people across the UK who risk not being able to afford the lifestyle they want in later life.
‘Four people confident People’s ideas about how they’d like to spend their retirement may differ – you may want to get help from bodies like Pension Wise, or perhaps seek independent financial advice.
putting aside for The sheer volume of information can be a confusing, so here are some general tips from Nigel Peaple, director of policy and research at the PLSA, to help with retirement planning: 1. Do consider enrolling in your workplace pension, if you are eligible and have not done so already.
One of the main benefits of a workplace pension is that your employer has to pay in too. Over a third (36 per cent) of people we surveyed said their employer matches their pension contribution, and a quarter (26 per cent) have an employer who pays in more than they do.
2. Don’t think that it is too late to start saving. If you haven’t been paying into a pension previously, and you think that there is no point starting now, don’t be discouraged.
The added benefit of your employer’s contributions, the tax breaks you get from the Government, and investment growth all mean that your money will go further than you think.
3. Do make use of the support available when you approach retirement. Pension Wise is a free Government guidance service offered to people aged over 50, to help them understand the different options available at retirement. 4. Don’t assume that the amount you are saving into a workplace pension is enough. The minimum workplace pension contribution level is currently 5 per cent, increasing to 8 per cent next year, and half (51 per cent) of people surveyed wrongly think this minimum is the ‘recommended amount’.
in five are not they are 5. Do consider whether you could be saving more for your retirement. A third of people said they could afford to save more towards their pension – increasing to 42 per cent of millennials.
enough later in While not everyone will be able to afford to, if you can put more into a workplace pension, it’s possible you could also benefit from higher contributions from your employer.
6. Don’t ignore your annual statement from your pension provider. It’s important to read your statements and consider whether you need to take any action as a result.
For example, paying more into your pension, updating your expected retirement age, or consolidating different pension pots into one with lower charges.
7. Do consider regulated financial advice. An independent financial adviser could help you get the right product or products to suit your needs and help your money go further.
8. Don’t be afraid to ask questions. If you have any questions about your pension pot, such as charges or your investments, your scheme provider will be able to help.
The Pensions Advisory Service can also offer free, independent information and guidance on pension matters.
9. Do spend time thinking about how you want to access your money in the lead up to retirement.
Only a third (31 per cent) are confident they understand all the options available.
Deciding what to do with pension savings is a very complex decision and sometimes you only have one chance to get it right, so it’s important to dedicate some time to retirement planning.
10. Don’t fall into a scammer’s trap. Be wary if a company approaches you out of the blue – whether over the phone, on email, or in person – and if they make claims of high returns with low risk, or tax loopholes. If it sounds too good to be true, it usually is.
This article provided by NewsEdge.