Retirement confidence rises: six steps to boost your pension pot
Just over half (52 per cent) of people now feel confident about their ability to retire comfortably, compared to just under half (48 per cent) in 2017.
However, the research by Aegon reveals many still remain in the dark when it comes to saving for retirement.
One in ten of those polled said they don’t have any pension savings and 36 per cent have never estimated their income needs for retirement.
They risk being unable to maintain their existing lifestyle when they stop working.
Steven Cameron, pensions director at Aegon, said: “It’s encouraging to see an indication of growing confidence over the last two years when it comes to being able to retire comfortably. But we must remain realistic.
“Overconfidence carries risks and people mustn’t be lulled into a false sense of security.”
He said auto-enrolment has led to millions of employees saving more for retirement, but not all will be saving enough to maintain their pre-retirement standard of living.
He also highlighted the growing population of self-employed who are excluded from auto-enrolment and can’t rely on an employer to support their retirement funding.
Steven Cameron’s tips to boosting retirement confidence
- Act now, make a plan and start saving.
The sooner you start the longer your savings have to grow. The more savings you have, the more choice you have at retirement. So, work out how much money you might need when you retire.
A good place to start is by basing your financial needs in retirement on your current lifestyle and adapting it to suit the “retired” you. There are online tools available to help you do this or for a personalised picture, seek financial advice.
- Patience could pay – retire later
Think carefully about your planned retirement age. You may have 60 or 65 fixed in your mind but being flexible may give you more time to build up enough savings so that you can actually enjoy your retirement in comfort and not be forced to scrimp too much.
- Get the full picture. Find out what State pension you will get
Check your state pension entitlement and state pension age. This way you’ll know exactly how much you can expect to receive and from when. This will help you work out how much extra you need to save yourself in a pension. Get a State pension forecast online https://www.gov.uk/check-state-pension or ring the Future Pensions Centre helpline on 0345 3000 168.
- Keep track of old pension pots
Multiple jobs with different companies means that a lot of people now have more than one pension and it has become easy to lose track of some pension savings. It’s very hard to plan your retirement without a full view of your savings and it’s important everyone has a clear idea of how much their overall pensions are worth and what their state pension entitlement is likely to be.
If you’re not sure whether an old job came with a pension then it’s definitely worth checking. The government offers a pension tracing service which can be found here www.gov.uk/find-pension-contact-details
- Review your investments
It’s important to keep track of how the investments within your pension fund are performing and assess whether you might be better off moving to a different investment fund.
When you join a workplace pension your contributions are put into the “default fund”. This is designed to be broadly appropriate for members generally. You might want to consider an investment approach that’s more tailored to your needs. Investment can be daunting for some people but it’s a topic financial advisers can help with. You can find an adviser through www.unbiased.co.uk
- Get professional advice
Planning a retirement income and when to start taking it requires careful consideration and a financial adviser can provide tailored advice to meet your personal needs and circumstances.