Not sure where to start when it comes to your pension? Our Head of Pensions, Kate Smith, has shared 8 top tips to get you started. So, grab a coffee and read these helpful pointers in just 5 minutes.
Pension basics: Kate’s top 8 tips
1. It’s never too late (or too early) to start saving
Whether you’re just starting out in your career or are nearing retirement, paying into a pension can be a good way to save for your future.
The contributions you make will benefit from government tax relief (money paid into your pension instead of paid as income tax), up to certain limits. Note that the value of any tax relief will depend on individual circumstances. In a workplace pension, you’ll usually benefit from contributions paid in by your employer too.
The money in your pension pot is invested, with the aim of growing this into a larger pot over time. However, the value of your pension can fall as well as rise and isn’t guaranteed.
2. Get to know your pension
Understanding your pension and how it works could help you to better manage your retirement savings. For example, you could look to find out:
- What sort of pension you have (hint: most newer workplace pensions are likely to be in a defined contribution scheme).
- What funds your pension is invested in – your provider can help you with this.
- How much you and your employer are paying in (asking your employer and checking your payslip is a good starting point).
- What age you can take your pension from – this government webpage might help.
3. Think twice before opting out of your workplace pension
Pausing or opting out of making pension contributions might seem like a good way to get some extra money in your pocket, particularly in financially challenging times. However, opting out of your pension means you’d lose out on the extra money from employer contributions and government tax relief.
If you do need to pause or opt out of making contributions, set yourself a reminder to review this at a later date. You can choose to opt back in again at any time.
4. Sign up to see how your pension is doing online
Registering for an online account is a simple way to have oversight and manage your pension savings. You’ll be able to update your personal details, see how your pension is performing and whether you’re on track – and make changes if you think you could be saving a bit more.
If you have a pension with us, you’ll have received a welcome pack with details on how to register for an online account. If you don’t have this to hand, don’t worry. Choose your pension type from our login page, and follow the instructions to register on the next page. If you’re not sure what type of pension you have with us, check with your employer.
5. Track down your old pensions
You could be missing out on money you’ve saved in workplace pensions from your previous employer(s) that you’ve lost track of or forgotten about. Check for any old pensions paperwork you might have around the house in the first instance. If you can’t find anything, then get in touch with your former employers to get the details of any old pension pots you might have – or try using the government’s pension tracing service.
6. Set your retirement goals and have a plan
Creating a plan and setting goals for the type of retirement you’d like could help to keep you focused and on track. There are lots of points to consider to help you shape your plan. For example, what you’d like to do in retirement, what sources of income you’ll have and how you wish to take your retirement benefits.
You should make sure any goals you set are realistic and review them regularly as your circumstances may change. Check out our article How to plan for retirement – a step by step guide to get started.
7. Review your expression of wish form
If you pass away before accessing some or all of your pension, a beneficiary or beneficiaries of your choice (such as a spouse or children) may be entitled to some of the funds. It’s important to review your expression of wish form and nominate your chosen beneficiaries to receive any money when you’re no longer here.
8. Check out your State Pension amount and date
The current full amount you can receive from the State Pension is £10,600 per year (£203.85 per week) – but not everyone is automatically eligible for the full amount.
Check out your State Pension forecast on the government’s webpage to find out how much you might receive and when you’re able to claim from.
Bonus tip: Get help if you need it
Here are some resources that might help you:
- If you have a pension with us, Aegon Assist is a free service offering impartial guidance on your retirement options.
- MoneyHelper is a government backed website offering free, impartial guidance on all kinds of money topics.
- Speak to a financial adviser. Advisers are experts who can provide personalised advice based on your individual circumstances. You can find an adviser through MoneyHelper – there’s likely to be a cost for financial advice.
Pension Geeks TV live shows
Kate shared her tips at our recent Pension Geeks TV live shows. In partnership with engagement specialists, Pension Geeks, we’re hosting live events throughout the year covering top tips and guidance on pensions and retirement.
To watch the sessions, visit pensiongeeks.com/tv.