New research by Hargreaves Lansdown, in conjunction with Opinium, found that 20% of people regret not starting their retirement preparations earlier.
Additionally, a further 15% of people stated that they wished they had contributed more to their pensions. Of the people surveyed, 57% had no retirement regrets.
Although more than half of the people surveyed are happy with their retirement plans, the research highlights a large proportion of people who wish they had done more to prepare for retirement.
“It can be easy to succumb to ‘set and forget’ when it comes to your pension, but this leaves you open to retirement regret later on. Getting to grips with your pension earlier in your career can save you a lot of bother,” said Helen Morrissey, head of retirement analysis, Hargreaves Lansdown.
“This was the main source of retirement regret, with one in five people aged over 55 saying they wished they got started on their pension planning earlier. Not contributing enough was a bugbear for around 15%, while the same proportion said they had made an error in assuming they would have enough by the time they retired.
“The bright spot of the research as that well over half (57%) of those asked said they didn’t have any retirement regrets. This could be because they have a good defined benefit pension, or it could be because they’ve checked in on how their pensions are doing periodically and made adjustments, as necessary.”
Five steps to avoid retirement regret by Hargreaves Lansdown
1.Keep an eye on how your pension is doing.
Don’t ‘set and forget’ your pension contributions. It’s important to check in on your pensions from time to time. Use a pension calculator to see what you are on track to receive – if it’s enough then great, but if not, you’ve got time to do something about it.
2.Boost those contributions.
Auto-enrolment sets minimum contributions but these on their own may not be enough to give you the retirement you need. Taking small steps such as boosting your contributions every time you get a pay rise or new job can be a relatively painless way of increasing contributions before you get used to spending the money.
3. Can your employer do more?
Many employers will keep their contributions at auto-enrolment minimums but there are employers who are willing to do more if you increase your contributions. This is known as an employer match and can really ratchet up the amount of money going in over time.
4. Find those lost pensions.
If you’ve had several jobs, then the likelihood is you have lost track of a pension somewhere along the way. This means there could be a pot worth thousands of pounds out there that could make a huge difference to your retirement planning. If you think you’ve lost track of a pension, then give the government’s pension tracing service a call. All you need is the company name or that of the provider. The service can’t tell you if you have a pension with them, but they can give you contact details.
5. Consolidation might work.
Once you’ve tracked down your pensions, it might make sense to consolidate. Having an overarching view of what you have can be a gamechanger for your planning. You may realise you have more than you thought, and this can transform your retirement planning. For instance, you may be tempted to take small pensions as cash and spend them but by consolidating them you are less likely to do this. However, make sure you aren’t incurring any unnecessary costs in consolidating such as early exit penalties. It’s also worth checking that you aren’t missing out on valuable benefits such as guaranteed annuity rates. It also rarely makes sense to transfer out of a defined benefit pension due to the guaranteed income on offer.