It’s Pension Awareness Week - the perfect time to give your future finances a little TLC. Whether you’re just starting out in your 20s or edging closer to retirement, engaging with your pension now can make a real difference later on. The good news is that it doesn’t have to be complicated. Here are five simple steps you can take to boost your pension confidence.
1. Track down old pension pots
If you’ve changed jobs a few times, there’s a good chance you’ve left a pension or two behind. According to our research, billions of pounds are sitting in ‘lost’ pensions across the UK. Taking a bit of time to track them down could mean a very welcome boost to your retirement savings. You can start by contacting your old employers or using the government’s free Pension Tracing Service.
2. Check your pension statement or online account
Your annual pension statement (or your online account) is a goldmine of useful information. It shows how much you’ve saved, what you and your employer have contributed, and how your plan’s performing. If you’re not sure what everything means, don’t worry, guides like this one can help you make sense of it all. And if you’re a PensionBee customer, you can log in to your online account (your ‘BeeHive’) anytime. Once you’re there, you can check your balance, combine old pensions with ease, make flexible contributions and track your progress using your ‘Retirement Planner’.
3. Use our Pension Calculator
If you want to know if you’re on track for the retirement you’re dreaming of, our Pension Calculator is a quick and easy way to find out. Pop in a few details, like your age, contributions, and retirement goals, and you’ll get an estimate of what your pot could be worth when you come to retire. You can try ours here. It’s a great way to see whether a small change today, like upping your contributions, could make a big difference tomorrow.
4. Start planning for retirement, whatever your age
It’s never too early, or too late, to start planning. If you’re in your 20s, you’ve got the advantage of time on your side. In your 30s and 40s, life is often busier with family and career, but even small steps can really add up. And if you’re in your 50s or 60s, now’s the time to get clear on your goals and make sure you’re retirement-ready. You can find tailored guidance for every stage of life in our Pensions Explained section of our website.
5. Engage with your finances
One of the biggest risks to your pension is simply ignoring it. Our report, The £500,000 Cost of Neglecting your Pension, shows that managing your pension can make a significant difference in your retirement. By staying engaged and taking steps to optimise your savings, you can ensure a more comfortable and financially secure future.
For example, it pays to be aware of annual management fees which can take a toll on your pension growth over time. As you can see below, if fees increase from 0.7% to 1%, your retirement pot could drop from £194,185 to £176,475 by age 68, leading to a loss of £17,711.
What’s the cost of paying higher fees?
| Annual fees | 0.7% | 1% |
|---|---|---|
| Pot size 68* | £194,185 | £176,475 |
| Difference in pot size | -£17,711 |
*Assumes a starting salary of £25,000 at age 21, average annual salary increases of 2%, 8% pension contributions from age 21 to 54, 3% annual investment growth and no withdrawals during the period.
Pensions might not be the most exciting thing on your to-do list, but taking even 10 minutes this Pension Awareness Week could make a huge difference to your financial wellbeing later on. Luckily, there are lots of ways to stay informed without it feeling like hard work. Listen to a pension podcast on your commute like The Pension Confident Podcast, join an online community, or check out some of the resources on the PensionBee website or app. The more comfortable you feel with your pension, the easier it is to make smart decisions about your future. Think of it as a little gift to your future self.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
