This time of year is the perfect time to get the admin tasks done that you’ve been putting off. The new year is always a good opportunity to make plans to improve your retirement prospects. We’ve come up with five suggestions to get you started.
1. Tracking down lost pensions
If you’ve frequently moved jobs moved your address a few times, chances are you’ve lost track of at least one of your pensions. Research from the pensions policy institution suggests that there are around 1.6 million unclaimed pension pots in the UK.
If you know your pension provider, tracking down a pension pot can be as easy as contacting your provider, updating your address details and asking for a statement.
If you don’t know your pension provider, your previous employer no longer exists, or you don’t have any contact details, you can use the government pension tracing service. This service allows you to easily and quickly locate any lost pension savings.
2. Check your State Pension
Your state pension plays a big role in the way you plan for retirment. It’s difficult to prepare for your retirement without knowing what your state pension will be. Therefore, it’s a good idea to check how much state pension you will receive and when you’re likely to get it. You can check your state pension here: gov.uk/check-state-pension. You’re also able to see any gaps you may have in your National Insurance contributions.
3. Check your investments
Each pension provider is different, as are the products that come with them. Without knowing the type of workplace pension you have or the provider, you might not be making the most out of your investment.
When it comes to pensions, it’s good to know that you’re money is working for you. Understanding what type of pension you have and the different options available can make a real difference to the amount you have when you retire.
Some pensions have high exit fees or include guaranteed annuity rates which may be lost, so it’s essential to understand the risks of transferring out of your scheme before proceeding.
A financial adviser can help to manage your investment portfolio and keep your target asset allocation back on track. An adviser can also help to ensure your financial plan remains appropriate and is on course to achieve its goals.
4. Pay in more
Paying more into your pension is relatively easy and means you can take advantage of current rates and tax relief. If you have surplus cash that is not marked for anything and you haven’t used all your yearly pension allowance, making a one-off pension contribution can be a smart way to get nearer that retirement goal. Pensions are subject to an annual allowance, which means you’re capped on the amount you can invest before you start paying tax.
5. Nominate beneficiaries
The way the pensions are passed on differ depending on the type of scheme you have. Most pension schemes allow anyone to inherit your pension savings, not just your spouse or civil partner. Since pension freedoms were introduced in 2015, If you die before you reach 75, you can now pass on your pension tax-free.
You can specify who your pension is passed onto by completing an ‘expression of wish’ form. This informs the trustees of your pension scheme who they should pay death benefits.
This form will need updating each time your circumstances change or your chosen beneficiaries change. If you’re not sure who your chosen beneficiaries are, or you want to update or change your details, speak to one of our advisers who can talk you through updating your ‘expression of wish form.