A survey carried out by YouGov only a few years ago found that over half the respondents who contributed to either a personal or workplace pension scheme had not reviewed their pension in the preceding three years. More worryingly, many of these people admitted that they had never carried out a pension review.
If this sounds like anyone you know, then it’s possible that their pension is currently not nearly as productive for them as it could be, meaning they could be shortchanging themselves in terms of what funds are available to them when they retire. As many of you know, reviewing your pension could even make a significant difference to when you’ll actually be able to start enjoying your retirement.
The world of work has largely moved on from the days when a person would stay with one organisation throughout their working life. The average worker today is likely to stay in each job they hold for less than five years before moving on. What this means in terms of pension savings is that most people are very likely to have paid into several pension plans. With all employers now legally required to offer a workplace pension, the likelihood of this happening is only going to increase.
It’s therefore more important than ever to regularly review pensions to ensure they are working as efficiently as possible. If any existing plans were set up a number of years ago, they may be being affected by charges and fees that are uncompetitive when compared to modern plans. Transferring savings to a more up-to-date plan could mean a greater proportion of the money paid in will actually end up in the retirement pot. And, of course, moving several different pension plans to a single provider will also be beneficial as it will be easier to track and manage exactly what’s been accumulated.
Whilst reviewing pensions is crucial, it can also be a very complex process. So, it’s always advisable to seek the guidance of a qualified financial adviser who will be able to spot both the pitfalls and the potential gains to be made. It’s also better to review sooner rather than later, as if you only give your pension any thought once approaching retirement age, the chances are it’ll simply be too late to fix any problems.