Is it time to give your pension a spring clean?
The start of the new tax year can serve as a useful prompt to refresh your finances and take a look at your pension. Are your plans on track for your retirement? Here are a few steps you can take.
PLAN AHEAD FOR A BRIGHT FUTURE
One of the most important things you can do is to think in terms of the lifestyle you aspire to in retirement, and work out the level of income you will need to fund it. Drawing up a budget that caters for your living costs and factors in the things you will want to enjoy more of, like hobbies and holidays, will help you get a clearer picture of the amount you’ll need to have saved.
The valuable tax breaks available on pension contributions (subject to the Annual and Lifetime Allowances) act as a clear incentive to save as much as you can comfortably afford. Many of us aren’t saving enough, so bear in mind that even small increases in contributions can add up over the years.
CONSIDER YOUR OPTIONS
It can help to think about alternative strategies such as working longer or going part-time, or even starting a new career. Today, those past State Pension age are much more likely to still be in employment than would have been the case a decade ago.
CALCULATE HOW MUCH YOUR PENSION IS WORTH
Reviewing your current pension arrangements will help keep your plans on track and provide an opportunity to increase your level of contribution if your circumstances permit. Getting a State Pension forecast from the government’s Future Pension Centre makes sense too.
KEEP TABS ON OLD PENSION POTS
With many of us set to have several jobs during our working lives, it’s important to keep track of pension pots from previous employment. We will be able to review these with you and help you decide whether it’s best to consolidate them into one pension plan.
A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.