8 steps to spring clean your pension's savings
We’re all experiencing a really challenging time right now – from balancing work and home life, navigating social distancing restrictions and of course missing family and friends. Not to mention that lots of families in the UK are struggling financially after losing income, which is a very real concern for many.
If you’re fortunate enough for your finances to be in stable financial position – now could be a good time to think about getting your savings for retirement in order. That’s if you’ve already given your home the Marie Kondo treatment and exhausted yourself with a Joe Wicks PE session, of course.It’s important to remember that although some of us do feel a constant pressure to be productive every waking minute – it’s not essential – in fact if you’re just trying to get through the days in the small ways you can – that’s perfectly fine too.
If you’re able to – think about how good it will feel knowing that you’ve taken positive action for your future self and towards your goals. As with most to-do-lists, the best way to start is to just get started.
We asked our very own Head of Pensions (and The Telegraph’s Pension Doctor), Kate Smith, to break it down into small manageable sized steps.
Kate’s 8 steps:
Step 1. Review your spending habits and consider if you have the scope to save a little more each month. It might seem obvious but it’s still a great place to start with your personal finance. Top tip: If you’re not into spreadsheet management, head to the app store on your IOS or Android device where you’ll find a wealth of spending tracking apps that do the hard work for you.
Step 2. Find your annual benefit statements. Remember it’s very likely you’ve already saved with more than just your current employer’s pension scheme. If you’re working from home, you’re still entitled to your employer’s pension contributions and furloughed employees will also be entitled to pension contributions.
Step 3. Go online. See if you’ve done all you need to do to be able to manage your pension online – it’s simpler and eco-friendly.
Step 4. Think about what financial milestones you’d like to hit. This could be anything from having a certain amount left over at the end of each month, being financially independent – or having paid off outstanding debts. Find out more on how can build your financial future and request help from a financial adviser to set personalised actionable goals that are tailored to your needs.
Step 5. Find out more about your current pension plan. If you pay in more, does your employer match your contributions? Knowing this could allow you to make more informed choices around retirement saving.
Step 6. Track down old pension schemes. These days, most of us change jobs quite often. And moving from employer to employer sometimes means moving from pension scheme to pension scheme – which can make it tricky to keep track of your different pension pots. The Government offers a free pension tracing service.
Step 7. Check your expression of wish form is up to date. It’s a document that allows you to request who you would like to receive any death benefits that might be payable on your death.
Step 8. Check your State Pension entitlement. To receive the full State Pension when you reach State Pension Age, you must have paid or been credited with 35 qualifying years of National Insurance contributions.
By following these steps, you could be on your way to reaching financial security. For more related content, check out the five habits that could help build a prosperous future and how to digitally spring clean.