Research by Hargreaves Lansdown in conjunction with Opinium has revealed that only one third of people are confident they can afford to retire.
A quarter of 1,500 people surveyed said they were unsure if they could afford to retire.
The data is a stark reminder to savers and investors of all ages to take control of their financial futures as early as possible by reviewing their pensions and taking action where necessary.
“It’s important to get to grips with your pension situation. Taking a look at what you have can either set your mind at rest or at least let you know what you need to do to make up the shortfall,” said Helen Morrissey, head of retirement analysis, Hargreaves Lansdown.
“Plugging your pension details into an online pension calculator can give you a sense of what kind of income you might get by the time you retire. This might seem scary, but you might find you receive a nice surprise and have more than you thought – even if you don’t then at least you’ve got time to do something about it.”
Hargreaves Lansdown’s Top tips to turbo charge your retirement
- Track down those lost pensions.
If you’ve had several jobs over the course of your career, then the chances are you’ve lost track of one along the way. However, over time even the smallest of pensions can grow, and you could be losing out on a pension worth thousands. If you think this is the case, then contact the Government’s Pension Tracing Service. All you need is either the name of your employer or pension provider and they can give you contact details so you can track it down.
- You might want to consolidate.
Once you’ve tracked down your pensions you might want to consolidate them. Having an overarching view can give you a proper sense of what you have and help you make more informed retirement choices. For instance, if you had a couple of tiny pots, you might be tempted to take them as cash and spend them. If you have one larger pot, you will be less likely to do this. It can also save you time as you’ll have less admin and could save you money. However, be careful before you consolidate. Make sure you aren’t incurring expensive exit fees on older pots. You may also be missing out on valuable benefits like guaranteed annuity rates.
- Can you boost your contribution?
Online pension calculators can show you the benefit of paying a bit extra into your pot. Over time even small extra contributions can really add up. It can be a good idea to revisit your contributions every time you get a new job or a pay rise.
- What can your employer do?
Many employers contribute at the auto-enrolment minimum but there are some who will increase their contributions if you increase yours. This is known as an employer match, and it can make a big difference, so it’s well worth checking to see if this is available.
- Are you getting all you can from the state pension?
Gaps in your national insurance record could mean you get less state pension than you thought. Take a look at your state pension forecast and if you do have gaps you can put a plan in place to fill them. People often have gaps for periods of time when they have been out of the workforce or living abroad. If you qualified for a benefit during one of these gap periods, then check to see if you are able to backdate a claim. Many benefits – i.e. Child Benefit come with automatic national insurance credits so if you can put in a successful claim, you can plug gaps for free. Other options are to pay for voluntary National Insurance contributions. These can be a very cost-effective way of plugging gaps. However, before you hand over money double check that you will benefit as there may be some cases where you won’t – for instance if you were contracted out of the state second pension.”