Why pension planning now is crucial to financial security in retirement

We’re nearing the end of Pension Awareness Week which has been the perfect moment to remind savers of the importance of regularly reviewing their pension planning strategy.

It’s no secret that pension planning is crucial to financial security in retirement. Yet, millions of people across the UK, particularly women, are still underprepared – whether through confusion about the process, an over-reliance on workplace auto-enrolment, or simply putting off the task. The consequences of this are serious, potentially leaving many without the funds needed to live comfortably, or even to meet basic needs.

The government and financial services sector have a key role to play in boosting pension engagement. But even without their support, savers can begin creating habits that lay the foundations for a financially sound retirement.

So, which habits should savers focus on?

Define your retirement goals

To plan effectively, knowing what you want to achieve is paramount. Setting clear retirement goals is the foundation of any good pension strategy. These goals give savers something to aim for, helping them stay motivated and engaged in the pension planning process.

Roughly work out the cost of maintaining your desired lifestyle, factoring in living expenses, travel, and other activities. With this target in mind, you can follow your progress and make necessary adjustments (such as increasing contributions or trying different investment types).

Monitor your pension pot

With one-in-six UK employees having never actually checked their workplace pension pot balance, this widespread failure to engage could cause big financial problems down the line. But it’s a simple fix: the act of checking your pension statement regularly – at least annually – will help you gauge the value of your savings, where it’s invested, and whether you’re on track to meet any targets. Equipped with this knowledge and awareness, it’s much easier to stay engaged with your planning.

If you can, up your contributions

Put simply, larger savings pots come from saving more. What’s more the earlier your start, the bigger difference compound interest can make in growing your funds. Some employers also offer schemes where they match percentage of your contributions, which can be a great way to boost your contributions (and essentially for free).

If you can, upping your monthly contributions even slightly is one of the best ways to improve financial security in retirement.

Talk to the professionals

There is a wide variety of investment and pension products available explore, some of which could be more suitable for meeting your individual goals than your current set-up.

Working with an independent financial adviser (IFA) can help, providing guidance through the complex landscape of pensions planning and creating a personalised financial strategy to align with your specific goals.

Engage to set yourself on the right path

So, before Pension Awareness Week comes to an end, why not take the opportunity to review your pension plan? After all, prioritising retirement finances is non-negotiable for security later in life, and actively engaging with it can ensure you feel confident that you’re moving in the right direction toward your goals.

*Lily Megson is the Policy Director at My Pension Expert, one of the UK’s leading independent financial advisers specialising in retirement, rated ‘Excellent’ on Trustpilot. Founded in 2010, My Pension Expert has helped thousands of people across the UK achieve the financial future they want. My Pension Expert is a certified B Corporation and is proud to drive positive impacts positive impacts across the business, environment, and society.

• Vote  
• 0
• 0
• You already voted!