What should you check when reviewing your pension?

Category: News

Have you reviewed your pension lately? Even though we make regular contributions to pensions, it’s not often something we think about until retirement is approaching. However, keeping track of progress during our working lives is important too.

Figures show that pension savers have been using their time in lockdown to get to grips with their retirement pots. Some 37% of pension savers, the equivalent of seven million people, have taken action relating to their pension in the last few months. One in seven admitted that the lockdown has prompted them to think about their pensions more.

So, if it’s been a while since you looked at how your pension is growing, now could be the perfect time. But what should you focus on? These seven areas are a good place to start.

1. The total value of your pension

The headline figure is probably what draws your attention when you look at your pension, and it’s something you should keep an eye on. Yet, it’s a task just 15% have done during lockdown.

Keeping track of the value of your pension can help you understand whether you’re on target to meet goals and give an overview of how investments perform. The current value alone doesn’t provide you with all the information that you need, which is where the forecast comes in.

2. Check your pension forecast

It can be difficult to understand how the value of your pension now will affect your retirement. Pension providers will offer a forecast, indicating how your savings are likely to grow over time. Keep in mind, this isn’t guaranteed, but it can be a useful base to work from.

With a forecasted lump sum, you’re in a better position to understand the lifestyle your savings will afford you. A financial planner can help put this into the context of your goals, such as the annual income it will deliver.

3. Act if you have a pension gap

Acting if you find there is a gap between your pension forecast and the amount you need to meet aspirations can help set you on the right track. The sooner you act, the easier it is to close the gap or seek alternative solutions. Even a small contribution increase can have a big impact if it’s taken early in your career thanks to the compounding effect.

The figures found 5% of pension savers have increased their contributions during lockdown. It’s a step that could make your future more financially secure.

4. Understand where your pension contributions are coming from

Every month, you’ll probably see a portion of your salary go into your pension. But it’s likely you benefit from other contributions too. Understanding the impact these have on your overall savings can help to highlight why adding to your pot is important.

First, if you’re employed, your employer will need to make contributions on your behalf. An employer must contribute 3% of your pensionable earnings. Second, the government also provides tax relief on the contributions you make. Tax relief is set at the highest rate of Income Tax you pay.

In both these cases, your pension is effectively benefitting from ‘free money’ when you contribute.

5. How your pension savings are invested

How a pension is invested is often overlooked. But it’s an important part of managing your retirement savings and making the most out of contributions.

When you first start saving into a pension, your money will be invested in the default fund. However, pension providers will offer alternatives. These will often include a variety of risk profiles or the option to select an ethical investment fund. As with when you’re investing outside of a portfolio, you should consider your goals, investment time frame and capacity for risk.

Just 8% of people have checked where their pension is invested during lockdown. However, 5% have made a change to their pension investments, indicating that for many the default fund may not be the right option.

6. Your pension age

A pension provider will make an assumption about when you plan to retire, usually linked to the State Pension age. If you plan to retire earlier or continue working past this age, you should update your profile.

How your pension is invested may be affected by your retirement date. For instance, many pension providers will move savings to a lower-risk investment fund as your retirement date draws near to reduce the risk of volatility significantly affecting value. If your retirement date is wrong, this may not align with your plans.

7. Check if your employer offers additional pension incentives

Your employer may offer additional incentives to encourage you to save more into a pension. These can prove valuable and help your retirement savings grow faster.

Some employers will match your contributions up to a certain level. In this case, increasing your own contributions would mean you receive even more ‘free money’. A salary sacrifice scheme may also be an option that’s available to you.

Please get in touch if you’d like to discuss your pension and what it means for retirement. The research found 38% of people lack confidence in their financial situation, our goal is to help you feel secure about your future.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by interest rates at the time you take your benefits.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.

What our clients say

Having dealt with various financial advisers in the past, both Gary and Kate give a far more personal service and explain things clearly. They take the time to understand what we want from financial planning and they have the knowledge to advise us in a variety of different aspects. Although we have only been clients from just before retirement, I would have no hesitation in recommending them to anyone of any age and we have absolutely no regrets in switching to Lifeplan.

Colin, Nottingham

A client since 2016

On my first visit to Lifeplan several years ago, Gary took lots of time to get to know my background, my financial objectives and me. There was never any sales push or persuasion to get my business. We’ve always discussed issues; Lifeplan give me options and I decide what to do. I don’t feel any pressure to do anything that I’m not comfortable with. I feel as though we have a personal relationship, rather than just being another business transaction. That's why I’m happy with Lifeplan’s guidance with my life savings.

Anthony, Northumberland

A client since 2014

We have been with Lifeplan for a few years now. Kate has been brilliant in helping us understand our level of risk and planning for retirement. Before we spoke to Kate, it was always something we would just say we’d get around to at some point! It’s really important to have a plan and I feel more secure about our finances now.

Kate, Gateshead

A client since 2015

I initially approached Lifeplan as my parents had used them in the past. I received excellent financial planning advice, and as I am still quite young and newly-qualified, this was invaluable. I also approached Lifeplan to help me find a suitable mortgage and again they were fantastic. They took a lot of pressure off me by dealing with lenders as well as solicitors. First class!

Jamie, Northumberland

A client since 2017

I would recommend Lifeplan to anyone, as they provide an excellent and honest service.

Philip, Newcastle Upon Tyne

A client since 2016

Initially we were unsure about contacting Lifeplan, as we were wary that any advice given may not be impartial or even to our benefit. We needn't have worried as we now have every confidence in the planning, investments as well as the will and trust Lifeplan helped us with. It is a great relief knowing we can trust the people dealing with our finances. We are always kept fully up to date and have annual meetings where everything is explained in clear and concise ways.

June, Northumberland

A client since 2016

I have more in my pot now than when I retired 11 years ago, even though I joined at the beginning of the banking crisis.”

Derek, Consett

A client since 2011

I have had nothing but the best advice from Kate Boon over the last 12 years, in relation to mortgages, investments and financial planning for later life. She’s always down to earth in her approach, but very knowledgeable and a real professional.

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A client since 2012

In the five years that Lifeplan has looked after our investments, we have received an excellent, friendly, professional service, which has given us very satisfactory returns on our savings.

Pauline, Lanchester

A client since 2011

Our family has worked with Gary and Kate for many years and have built up a good trusting working relationship with this professional, efficient and caring company. We feel that they always consider our specific financial needs and provide advice accordingly. We definitely feel we are in safe hands with Lifeplan.

Julie, Consett

A client since 2010

As retirement approached, I was uncertain how to proceed. Advice from Lifeplan set us on the right track and we are now enjoying a very comfortable lifestyle. Good advice was provided regarding our wills and Powers of Attorney. We appreciate the guidance given and feel happy and secure in our retirement.

Albion, Tyne and Wear

A client since 2015

Lifeplan is an approachable and plain-speaking business. They are always there to help and assist, as well as provide annual reviews of my current finances and what can be changed to benefit me in readiness for retirement.

Ian, Newcastle Upon Tyne

A client since 2011

Kate is my financial consultant and has put a lot of work into my investments recently, making it very clear how it has been invested and where. This appears to be honest, up-to-date advice from someone who clearly knows the markets. I receive a pleasant, friendly service, in a nice modern office also.

Andrew, Hexham

A client since 2015

Lifeplan provides a friendly, professional service at reasonable cost. They are very responsive to any request I make and keep my portfolio of investments in line with my ongoing requirements. In 12 years of using Lifeplan, I have never had cause for concern.

Rob, Newcastle Upon Tyne

A client since 2006

Gary and Kate have been excellent in understanding our needs and requirements and have given first class advice. They have helped with our financial planning and setting up a trust to ensure our wishes for the future will be met. Nothing is too much bother for them and they provide an excellent service. My wife and I would happily recommend them.

John, Newcastle Upon Tyne

A client since 2014

When I retired, I wanted my capital to work for me. I was looking for a reasonable but realistic return on investment, but without a high risk. Lifeplan have provided me with just that. I have an annual review, where we have a frank discussion about current arrangements and any changes that Lifeplan may recommend. There is no jargon and things are explained in an understandable way. Plus, they are thoroughly nice people.

Harry, Newcastle Upon Tyne

A client since 2015

I found Gary and Kate very easy to speak to. They listen to your concerns and wishes, then give you the best options on how to invest moving forward. Their choices are always explained to you in understandable terms.

Edward, Hexham

A client since 2014

We have always been given helpful advice in a most professional manner. Every detail was explained fully in a way that was easily understood. We would have no problem in recommending Lifeplan to anyone wishing to invest.

Lisa, Newcastle Upon Tyne

A client since 2011

I'd tried several advisers prior to being introduced to Gary and was not happy with their service. Gary was instrumental in organising our pension information, so that we could understand what we were paying in to and why. Sounds easy, but we have had three previous advisers from some of the largest banks that could not do this. Since meeting Gary, we have successfully transferred our pension fund and original property in to a new scheme. In addition to this, Gary has successfully helped our company purchase a new property through our pension.

Bruce, Tyne and Wear

A client since 2013

Gary sorted out my pension by tailoring it to my own specific requirements. Until then, it was with large organisations and I really felt out of control with it. He explained technical financial terms well and I felt that he was not happy until he knew I fully understood all aspects of the business. There was no pressure from him and I always felt very confident that he was doing the best he could do on my behalf. He is fully qualified, takes pride in his job and in my opinion is impeccably trustworthy. His team is also very efficient, keeping me advised on all aspects of our business.

Henry, County Durham

A client since 2009

I was looking for financial planning and not just financial advice. Gary explained options in an easily understandable way and offered an alternative way of looking at the impact on different financial models. Initial advice was exactly what I wanted, and I am satisfied that the options I have now chosen are based on sound advice. I have decided to become a long-term client. What myself and my wife wanted was someone whom we felt we could trust with giving impartial advice on our future financial situation, and this we feel we have achieved with Gary

Colin, Nottingham

A client since 2016

I was recently widowed and wanted to simplify my financial affairs for my children should anything happen to me. Gary was very understanding of my needs and dealt with me patiently and in a simple way. I believe the products he recommended will benefit me.

H Walker, Newcastle Upon Tyne

A client since 2016

I contacted Kate to review my pension arrangements, with a view to changing my then pension provider. She helped and advised me on what I currently had, and helped find something better for my current and future needs. Obviously, it’s too early to say, but Kate clearly explained and showed me on the software what my pension could be like when it comes to retirement under various scenarios.

Richard, County Durham

A client since 2008

Redundancy required a re-think of my finances and future planning. Gary set up an investment portfolio following a detailed discussion, including provision of advice that met our needs. I am very pleased with the overall return over the last six years, balanced against the level of risk we were prepared to take.

Brian, County Durham

A client since 2012

Gary has developed a structured plan to ensure our funds will last in retirement. We are now deciding when to retire or reduce to part-time employment.

K Walker, County Durham

A client since 2010

We made an appointment to discuss the remortgage of properties. Kate understood our requirements and personally sorted the process in a very professional way from the start to a successful conclusion. She dealt with all matters, no matter how small.

Jim, County Durham

A client since 2016

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