How do I check my pension, and how often should I review it?
When was the last time you checked in on your pension? Failing to keep an eye on your retirement savings could be an expensive mistake. Here we explain how often you need to review your pot and the steps you need to follow.
You don’t need to obsess over your pension, but it makes sense to review it once a year.
You can usually find out how much you’re paying for your pension, review its performance and make changes online.
It’s important to track down any pensions that you may have ‘lost’.
If you have a lot of old pensions, it may make sense to consolidate them into one pot.
Unbiased can quickly match you with a financial adviser who can help you with retirement planning as well as your pension investment strategy.
Paying into a pension is just the start of the retirement planning process.
If you want to have a comfortable income in retirement - and make your savings work as hard as possible - it’s important to review all your pension pots regularly.
But that’s easier said than done, with lots of us failing to keep tabs on our retirement savings.
The Financial Conduct Authority’s latest Financial Lives Survey revealed that half of people paying into a defined contribution pension had not checked its value in the last 12 months, while 25% didn’t even know roughly how much their pot was worth.
In this guide we explain how to access your pension information, how often you should review your retirement savings, what to look at and how a financial adviser can help.
Our focus is on defined contribution pensions. You can find out more about defined benefit pensions (including final salary schemes) here.
Find out how to trace lost pensions
We’ll explore how you can access your pension information, how often you should review your pensions, and how a financial adviser can help.
How can I check my pension?
You should now be able to monitor most pensions (including workplace and personal schemes) online, whenever you want.
If you can’t access your pension online, talk to your employer (for workplace pensions) or contact the provider directly to get the information you need.
You should also receive a pension statement in the post every year.
What should I check when looking at my pension?
There’s a lot that you can access online when checking your pension, which can help you with your retirement planning.
You can access valuable information such as:
The value of your pension
Details of where your contributions are invested
The performance of your pension investments
The risk profile of your pension fund
Details of your annual fees
It’s vital that you regularly check your pensions to ensure you’re saving enough and your pension fund is performing well over the long term.
Are you getting your annual pension statements?
Each year you should get a helpful pension statement in the post.
These provide a wealth of information (listed above) about your pension and its performance.
If you haven’t received one for a while, or you have recently moved house, call your pension provider to request one and to ensure it has an up to date address for you.
It’s normal for the value of your pension to rise and fall over time - that’s an inherent part of investing in the stock market (referred to as short-term volatility).
However, if poor performance is a long term issue, or your investments aren’t performing as well as equivalent options, then you may need to reconsider your choices.
You might also want to change your investments if you would prefer to invest in ethical or sustainable funds.
Learn more about pension fees here.
You should also evaluate the risk level of your pension fund.
Ask yourself: Are you happy with the returns on your fund? If you’re young and your investments are relatively cautious, there may be an argument for taking some additional risk to boost your returns. Over the years you should be able to ride out any short-term volatility. If you are unnecessarily cautious, there is a risk that you won’t get the growth you need.
Usually, a pension fund with a greater proportion of its investment mix in equities (stocks and shares) is considered higher risk than one with more in bonds, but with higher risk comes the potential for higher rewards.
If you’re getting a pension forecast from your provider, don’t forget that this is based on certain assumptions and is not guaranteed. Also bear in mind that it won’t take into account other pension pots you may have (although you can consolidate your pots so they’re all in one place).
It’s also a good idea to check fees on your pensions. They may not look big but over time they can eat into your returns and place a real drag on your investments.
You shouldn’t switch out of your current workplace pension. But, if it’s a personal pension or an old workplace pot that you’re no longer paying into, you may be able to cut your costs by transferring your savings into a new pension with lower fees.
Time for a pension top up?
Finding out how much your pot is worth and getting an indication of your retirement income, can also be a useful prompt to pay more into your pot.
You can either increase your monthly contributions (some employers will match what you pay in) or invest a lump sum, if you have the money to spare (for example you have received a windfall like a bonus or inheritance).
How often should I review my pension?
It’s a good idea to review your pension once a year to assess its performance and decide whether or not to make any changes.
If you review your pension more regularly, you may become anxious about your fund's short-term performance and make a rash decision, which could have a longer term impact on your retirement savings.
How can a financial adviser help with my pension?
A financial adviser can help you with your pension by:
Helping you create a retirement plan and investment strategy.
Reviewing your pension fund’s performance.
Making sure you’re being tax-efficient.
Helping you decide on the best way to access your pension in retirement.
Helping you decide if pension consolidation is right for your circumstances.
Advising you on whether you should transfer or consolidate pensions.
How do I find any lost pensions, and can I consolidate them?
If you change jobs regularly, you could end up with lots of pensions and it's not easy to keep track of them all.
If you think you’ve misplaced a pension, all is not lost.
The government has a useful Pension Tracing Service that can help you find a lost personal or workplace pension. Alternatively, you can contact previous employers or your current one to ask them about any pensions you may have.
To make it easier to monitor all your retirement pots, it may make sense to consolidate any old workplace pensions into one.
If you’re considering consolidating your pensions, there’s a lot to take into account, including the management fees, investment performance, and whether you’ll lose any special benefits if you do.
For example, you may have a guaranteed annuity rate, which may be a higher rate than you can find elsewhere and potentially offer you more income.
Pension consolidation makes it easier to manage your retirement savings and could potentially save you money if you switch to a plan with lower fees. But there’s a lot to consider, so it makes sense to get expert financial advice first.
Can I check how much my state pension is worth?
While the state pension is usually not enough to live off in retirement, it can provide a welcome boost to your finances.
To be eligible for any state pension, you need at least 10 qualifying years on your national insurance (NI) record. To be eligible for the full amount (currently £241.30 a week), you need 35 qualifying years.
You can find out how much state pension you could get and when you can get it, as well as how to increase it (if possible) using the government’s state pension forecast tool.
Need help planning for retirement?
Planning for retirement can be stressful, as you need to make sure you save enough money to keep you going for 30 years or more.
So, it's a good idea to be proactive and take control of your pensions by ensuring they work as hard as you do.
Unbiased can match you with a qualified financial adviser who can help you review your pension and develop a retirement plan so you don’t run out of money in later life.
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