In a year which has gripped the nation with political uncertainty surrounding Brexit, the dominating headlines around defined benefit pension schemes and a General Election, this year’s Pension Awareness Day hopes to bring some clarity for those in the midst of saving for their future financial security.
Most of us are aware that our future financial position can be unpredictable, whatever age we may be now. Pension Awareness Day was established three years ago by Pension Geeks, with the aim of the campaign being to ‘create awareness and unite the financial services industry, businesses, employers and the government to share innovative ideas and to work together in driving engagement with retirement saving.’
The day to find out something new about your pension
With recent increases in demand for pension advice, it is clear people are beginning to understand the importance of gaining professional financial advice and guidance. However, recent figures show that too many people still aren’t saving the recommended amount, despite being aware that they need to save more. Recent findings published this month from Pension Geek revealed 83 per cent wished they were putting more away for their retirement, while 30 per cent of those over 55 are unsure if they will be able to retire on their current savings.
The research also discovered almost 86 per cent of those surveyed believe there is not enough information about pensions available, while 25 per cent believe that the information which is available is far too complicated to understand. Clearly, these results show there is still a big education process to go through to help the nation prepare for retirement.
Whether you are close to retirement age, or think you are too young to start saving, there is always something more you could be doing to increase your financial cushion in years to come. In support of this year’s Pension Awareness Day, here are five top tips to help guide you through the pension maze.
1. The majority of the ‘golden’ defined benefit pensions are closed to new members and even those that remain active are often closed to future accrual. Therefore, if you have a defined benefit pension it is essential you seek advice from a regulated adviser.
2. The reliance on the State Pension will need to decrease as time goes on. There is a misconception that this will be sufficient to live off, when in reality it is usually not. It is paramount that you consider more than one option when planning for retirement before making any decisions.
3. Remember that no age is too early to start saving. The older you are when you start saving for your pensions, the harder it is to save and the more you have to put away. Being able to set up a child pension is something that can now be done by a parent or grandparent. If you can afford it, this is a great way to give your children a head start towards the growing recommended retirement fund.
4. The ability to access pensions flexibly can seem attractive in the short term, but may leave you with a much depleted pension (or possibly no pension at all). Ensure you are always looking at the future and reviewing how your current decisions may affect you in years to come.
5. The lack of monitoring or financial planning can often force people to work far beyond their expected retirement. The key is to make sure they have enough money to live comfortably in retirement.
If you are concerned about the future of your pensions, contact a specialist independent financial adviser today to talk through your current situation and options for the future.
The above article was first published by unbiased on 15th September 2017