Although there is no bad time to review your retirement arrangements, with all the changes taking place in the sector, now is a particularly appropriate moment to ensure you are making the most of your pension.
Lost and found
Research conducted by Age UK has found a quarter of UK adults have lost track of at least one pension accumulated during their careers. The average individual aged over 65 has worked for at least five employers – and a quarter of those aged between 25 and 34 have already worked for a similar number. Given this, we are more than likely to have several different pension pots. To trace a missing pension, try contacting the Pension Tracing Service at https://www.gov.uk/find-lost-pension or call 0845 6002 537.
Consider your options – but take care
If you have several different pension pots, you might consider consolidating them into one. Most occupational and private pension schemes can be transferred and consolidating all your pension savings could cut administration and paperwork, make it easier for you to track the performance of your pension pot and may also reduce costs. But you should take advice – once made, the decision to switch is irreversible and a wrong decision could incur harsh penalties. Chilvester can help you with this.
Take a closer look
Every year, your pension provider should send you a statement showing the current value of your pension pot, and a forecast of what it will be worth when you reach your retirement age. Don’t just file it away – take a closer look. Does the projected value of your pension pot bear any relation to the amount you are aiming for? If not, consider what action you could take to boost its value – perhaps you could boost your pension contributions or you might have to end up working for longer. At present you can pay up to £3,600 or 100% of your earnings, whichever is larger, into a pension every year and receive tax relief on contributions of up to £50,000 (reducing to £40,000 for the 2014/15 tax year).
Focus on the future
Finally, we may talk about “retirement age”, but do you actually know your state pensionable age? Not so long ago, men used to retire at 65 and women at 60 but times have changed. The age at which you become eligible for your state pension – and the amount you receive – is determined by your National Insurance contributions. Find out more using the government’s State Pension Calculator at https://www.gov.uk/calculate-state-pension.
For help with your retirement planning, contact Chilvester to arrange a free initial consultation.