In 2020, the pressures of the pandemic forced people to focus on their finances and retirement options like never before.
And with a whole host of strict social distancing measures, national lock downs and furlough arrangements all to contend with, older members of the national workforce have really been up against it. Especially where their retirement plans were considered, individuals have been forced to change their plans, or else take early retirement – many without adequate funds in place.
As the new year dawned, many might have hoped for some much-needed respite on the COVID front. And while that hasn’t quite been the case thus far, there is still no time like the present for savers to get their retirement finances in good health. Particularly throughout such uncertain times, this should remain a priority for individuals.
With this in mind, here are some tips to get your retirement strategy in check in 2021.
Creating a suitable pension plan
The best place to start is always the beginning; and by this I mean ensuring that savers create a sustainable retirement plan. Whilst a vital part of one’s saving strategy, a surprisingly large proportion overlook this element. Indeed, a recent survey from My Pension Expert of over 900 UK adults has revealed that a staggering 42% of do not have a clear retirement strategy in place.
Often, it can be helpful to seek independent financial advice in circumstances like these. An independent financial adviser will be able to provide savers with the best options to suit their individual requirements and financial situation, to ensure a financially secure retirement.
A fuss-free retirement
For many of us, the working week can be long and stressful, meaning that pension contributions is often the last thing on our minds. So, it is important for people to make saving as hassle-free as possible.
For members of a workplace pension scheme, this shouldn’t be too much of a problem. Their employer will automatically deduct an agreed amount each month. If an individual wishes to change the amount they contribute, then all they need to do is simply discuss this with their employer.
However, this will not be the case for everyone. Individuals who have a personal pension will have to organise their own contributions – and it might be easy to forget to do this at the end of the calendar month.
That’s why a sensible next step would be to ensure that they are paying in adequate funds into their pension pot. To do this, savers should consider setting up a direct debit, or scheduling in time on a quarterly basis to re-assess the amount they contribute.
Locating lost pension pots
Nowadays, not many individuals remain with one organisation or employer throughout the course of their entire career. Consequently, pension planners end up accruing a number of different pension pots as they climb the career ladder, and often these end up getting lost. In fact, a recent survey from My Pension Expert has uncovered that a quarter (25%) of adults over the age of 40 have lost track of their pension pots.
To track down lost pension pots, savers should contact their previous employers, or use the Government’s handy pension tracking tool. While this tool can’t inform savers about the specific amount they have amassed, it does provide individuals with the information they need to contact their provider and get to work on streamlining their pension.
Most individuals will be all too familiar with doing some market research before choosing financial products. Whether investigating credit card and loan options, or even trying to keep their water and electricity bills down, it is always sensible for savers to reassess their options regularly – and pensions should be no different.
Pension planners would do well to search the market to investigate the various pension providers and products on offer – they might just find one that is a better fit for their lifestyle. Although, whilst savers are able to switch at any time, it is important to note that some providers will impose fees on clients looking for pastures new, so reading the fine print before making a final decision is vital.
Keep up to date
All in all, the world of pensions can be uncertain territory for the best of us. Especially during turbulent economic times like these, where there are new developments on an almost daily basis. With changes touted to everything from the triple lock system and tax relief, as well as the possibility of negative interest rates, it is more important than ever for savers to stay informed.
Where possible, I would advise individuals to set some time aside to research current affairs and developments in the pension sector. Certainly, this would be time well spent, as it might just enable savers to employ their knowledge to make vital changes to their retirement strategy at an opportune moment.
Undeniably, there are tough times ahead this year. That’s why savers should seize on the opportunity to get their finances in good health and re-invigorate their retirement strategies – doing so will set them on the path to a prosperous retirement.
Andrew Megson is the Executive Chairman of My Pension Expert, the UK’s number one Advised Retirement Income Specialist. Founded in 2010, My Pension Expert specialises in providing independent advice to UK consumers about their pension plans – it arranges millions of pounds worth of retirement income options each week.