TAKE CONTROL OF YOUR PENSION
It’s never the wrong time to review your retirement arrangements. However, changes to the pensions system mean that now is a particularly appropriate moment to ensure you are making the most of your pension.
Lost and found
The average UK individual has 11 different jobs during the course of their working life. Given this, we are more than likely to have several different pension pots. Estimates published by the Department of Work & Pensions (DWP) suggest that there could be up to 50 million dormant or lost pension pots by 2050. If you want to trace a missing pension, contact the Pension Tracing Service at www.gov.uk/find-pension-contact-details or call 0345 6002 537. N.B. You’ll need the name of an employer or a pension provider to use this service.
Consider your options
If you have several different pension pots, you might consider consolidating them into one. Most occupational and private pension schemes can be transferred and consolidating all your pension savings is likely to cut administration and paperwork, make it easier for you to track the performance of your pension pot and could also reduce costs. But take care! Proceed with caution and take expert advice – once made, the decision to switch is irreversible and a wrong decision could incur harsh penalties.
Take a closer look
Every year, your pension provider should send you a statement showing the current value of your pension pot, and a forecast every year, your pension provider should send you a statement showing the current value of your pension pot, and a forecast of what it will be worth when you reach your retirement age. Don’t just file it away – take a closer look. Does the projected value of your pension pot bear any relation to the amount you are aiming for? If not, consider what action you could take to boost its value – perhaps you could work longer or boost your pension contributions. At present, you can pay in and receive tax relief on contributions of up to £40,000 per annum.
Focus on the future
Finally, while we may talk about “retirement age”, do you actually know your state pensionable age? Not so long ago, men used to retire at 65 and women at 60 but times have changed. The age at which you become eligible for your state pension is going up – and the amount you receive is determined by your National Insurance contributions. Find out more using the government’s State Pension Calculator at www.gov.uk/state-pension-age