What are YOUR top three questions about pensions? How to find answers and get your savings on track for a comfortable old age
- People want an income forecast, a pot update and a savings health check
- But fewer feel confident about taking money decisions after a tough year
- Worried your pension will fall short? Scroll down to find This is Money’s to-do list
Half of savers find information about their pensions overwhelming and many are at a loss over what to do with it, new research has found.
But they say a future pension forecast and a update on their current pot size come in the most handy when planning retirement, followed by a health check on whether they are saving enough.
Fewer people now feel confident about taking financial decisions after a year of high inflation, rising interest rates and volatile markets, according to a survey by Standard Life.
Worried your pension will fall short? Find This is Money’s to do list below
Pension savers have had a tough time as household bills have rocketed while investment pots meant to fund old age plummeted in value – although markets have seen a recovery since the start of the year.
Standard Life found 72 per cent of the 6,000 UK adults it surveyed in autumn 2022 are doing little to nothing to plan for their retirement.
However, it found 93 per cent of people who did plan ahead and retired on £20,000 a year or less are enjoying later life, compared with 66 per cent on similar incomes who failed to sort out their finances in advance.
Some 59 per cent said they felt confident about money decisions, down from 63 per cent the year before.
The three pieces of pension information people find most useful to have are:
– How much money it will give them in retirement
– How much money is in their pot now
– How to make sure they’re paying in enough
But 50 per cent think the pensions information they receive is too hard to absorb and 41 per cent have no idea what to do with it.
We asked for guidance for readers wanting answers to the above from Jenny Holt, managing director for customer savings and investments at Standard Life.
She says: ‘There are a number of pension calculators available to give you an idea of how much your pot will give you in retirement.’ (By way of example, her firm has a pension calculator here.)
‘If you’re considering buying an annuity, Money Helper’s tool is really helpful, however it’s important to remember that annuity rates fluctuate over time.’
‘If you’re unsure how much money is in your pension pot, get in touch with your provider.
‘You might find you have a number of small pots, particularly if you’ve changed employers a few times. You can use the Government’s pension tracing service to track down old pots.’
When it comes to making sure you are saving enough, Holt says this depends on the kind of lifestyle you want in retirement.
She points to the Retirement Living Standards tool, compiled by industry group the Pensions and Lifetime Savings Association, as a place to start to work this out – see below.
Retirement income needs for single people. Check the link above to find out what couples require for a decent old age
‘As well as everyday costs, the tool factors in what’s needed for extras – gifts, holidays and large purchases, and the one-off expenses that come up throughout life,’ says Holt.
‘For a more personalised view, it’s good to get advice if you possibly can – try using Unbiased to find an adviser, or using the Government’s Pension Wise guidance service in the first instance.’
Holt adds: ‘If you are unsure what to do when you receive information about your pension, the most important thing to remember is that there are plenty of places to turn to for clarification.
‘The first port of call is to contact your provider, and if the plan was set up by your employer, you could also contact the HR team.’
