Consumers are being urged to strengthen their pension during this year’s Pension Engagement Season, however new research from Standard Life reveals one in seven (14%) people have never checked even their pension, despite reviewing their other financial products more frequently.
Worryingly, those who are closest to retirement are more likely to have not engaged with their pension, with 17% of over 55s admitting they’ve never checked theirs, compared to 12% of 18–34-year-olds, and just 8% of 35–54-year-olds. Women are slightly less engaged with their pension than men, as 14% have never checked their pension versus 11% of men.
While it’s not necessary for someone to check their pension every day, it’s worth reviewing it at least once a year - however just over half (56%) do this. Less than one in 10 (9%) look at their workplace pension each week.
In contrast, one in three (35%) review their cash savings at least weekly, and 18% look at investment accounts every seven days.
Taking action
Among those who did review their pension in the last year, one in five checked their forecasted retirement balance (20%). Smaller proportions took more active steps:
• 14% topped up their contributions
• 11% adjusted their investment risk level
• 10% made a one-off payment
• 9% consolidated their pensions.
Gail Izat, Managing Director for Workplace Pensions at Standard Life, part of Phoenix Group said: “Your pension pot might not need daily attention like your bank account, but checking it at least once a year is a smart move. It helps you understand how much you’ve saved, what that could mean for your future, and whether you might want to make changes like increasing contributions or reviewing your investments. Regular check-ins can also help shape the type of retirement lifestyle you’ll be able to afford. With one in seven people never reviewing their pensions, many risk missing opportunities to boost their savings – or even risk losing track of their pots altogether. As retirement gets closer, staying on top of your pension becomes even more critical, yet it’s worrying to see how many over 55s have never looked at their balance. The process is very simple, and if you’re unsure how to start, your pension provider or employer can guide you through it.”
Gail Izat shares tips on how to check your pension pot:
• How do I check how much is currently in my pot? “You should receive an annual statement from any workplace and personal pensions – this will be sent to you by your provider. If you don’t receive a statement, then you can ask for one. Make sure your provider has the right contact details for you so that you are able to receive relevant information.
“You can often also access your pension details online, if you’ve set up an account, or through your provider’s app.”
• How can I see what my pension pot might be worth in retirement? “Your annual statements will provide an estimate of your future pot value, and the regular retirement income your pension is on track to generate. This is based on you using your pension pot to buy a guaranteed income for life (known as an annuity), although there are other ways to access your savings.
• How do I check what I’m contributing to my pension, and can I make top-up payments? “You can check what you contribute to any personal, workplace or self-employed pensions through your pension statement. You can also make any additional payments into your pension at any time you like. To top up your private or workplace pension, you can usually make both regular contributions and one-off lump sum payments.
• Can I find out how much my current pension pot might be worth in future? If you save money into a pension plan, it’s worth knowing if your savings are on track to help you afford your ideal lifestyle after you stop working. Many providers offer pension calculators that can help you decide if your current pension payments will be enough to fund your retirement lifestyle. It can also help you see if you need to start saving more.”
• Can I check my pension on the go? “Not all pension providers offer an app, but many do – and it can be a convenient way to stay on top of your savings. If your provider has one, it’s worth downloading so you can check your balance, contributions, and projected retirement income anytime, anywhere. It’s a simple way to make pension check-ins part of your routine – whether you’re on your commute or just have a few spare minutes.”
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