We are 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 are fortunate enough for your finances to be in stable financial position – now could be a good time to think about getting your savings organised for retirement.
If you can – think about how good it will feel knowing that you have 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……
Lee’s 5 steps
Step 1. How much money do I need?
Love your spreadsheets !
Take time to complete a thorough record of your expenditure both now and what you want it to look like in retirement.
Not only think about your essential day to day expenses, but those non-essential costs that make retirement enjoyable.
Also consider a contingency fund if things do not go according to plan – such as repairs, illness, and care costs.
Plan for at least 30 years of retirement….
Step 2. How much have I got?
Find your annual benefit statements or contact your pension providers to get up to date values on your pensions.
Remember it is very likely you have already saved with more than just your current employer’s pension scheme.
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 which may help track down those missing pots – you can access the service HERE
It is also is worth checking your state pension entitlement – you can do that on the government site HERE
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.
You may be able to make up any shortfall.
Step 3 Do I have enough and will it last?
Think about what financial milestones you would like to hit. This could be anything from having a certain amount left over at the end of each month, to being financially independent or paying 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.
There are also some great retirement planning calculators available free for consumers to use from organisations such as Which and Barclays.
Step 4 Important Admin !
Check that your expression of wish or your nomination form is up to date.
This is a document that allows you to nominate who you would like to receive your pension in the event of your death.
Review the charges that are being taken from your plans and if in doubt, contact your pension provider to get a full breakdown.
How much risk are you taking with your money ? Review how your money is being invested and check that you are not taking more risk than you are comfortable with.
These last 2 points could have a massive detrimental effect on your future pension values, if allowed to run unchecked……
Step 5. DIY or Advice
There is a wealth of information online on how to manage your pensions yourself.
The great news is that over the years self service platforms such as Hargreaves Lansdowne and Nutmeg, have made it easier for customers to manage their pension funds themselves for relatively low fees and charges.
However, if all this seems to be too daunting, you could always engage the services of a retirement specialist or IFA.
All initial meetings are normal at no cost and at the end of this first meeting, the adviser should give you a clear breakdown of fees that may be charged for subsequent advice.
It pays to speak to a few advisers, before you decide who to work with.
By following these steps, you could be well on your way to reaching financial security and having a greater understanding of what your financial future looks like.`
I also have a Facebook group Pensions Made Simple that also has useful articles and discussions about pensions and retirement.
Good Luck !