The daily grind can bump up your pension

Get a grip on your level of saving

money@mirror.co.uk

CLUELESS

A third of people haven’t got a clue how much they have in their pension savings and one in five has lost track of one or all of their pension pots, according to research carried out by pension firm Aegon.

Meanwhile, data from insurance giant Aviva reveals that half of UK employees know they need to save more than they currently put away.

The problem with pensions is that people think they’re complex and that prompts them to adopt a head-in-thesand approach. But in reality, a pension is simply putting a bit of cash away from your income during your working life to give you an income when you retire.

Andrew Tully, technical director at Canada Life, says: “Just think of it as a long-term savings plan to provide for your retirement. Making minimum payments into a pension gets you into the savings habit but may not provide the retirement you hope for.

“Always try and make the most of the generous tax benefits, and if you can afford to, make extra contributions, either as circumstances allow or ideally as regular payments.”

Some pension firms are doing their bit to prompt people to take more notice and keep an eye on their pots, rather than leaving things to chance.

Aegon research found around half of firms have digital platforms or portals where employees can access information about their pension scheme, and almost half hold in-house group seminars for staff about workplace pensions. Lloyds Banking Group has brought in some joined-up thinking across its brands.

Bank account holders with Lloyds, Halifax and Bank of Scotland, who also have a Scottish Widows pension, either as a personal plan or via their workplace, can go into high street bank branches and view their pension on tablets there.

And telephone banking staff will be able to see a customer’s pension details and provide basic assistance, before handing people over to Scottish Widows staff for more complex queries.

Robert Cochran, retirement expert at Scottish Widows, says: “Auto-enrolment has been successful but more needs to be done to help people engage with their pension savings and ensure they’re putting aside enough to fund the retirement lifestyle they want.

“With a clearer idea of what you have, what you’re saving and how that translates into pounds in the pension pot, it’s a much easier task for people to start thinking about their retirement saving more like the way they manage their everyday money.”

Don’t wait until it’s too late to do anything. Here’s our six-step plan to building up a decent pot... You need to have a goal for your pension savings. If you don’t know what you need, how can you hope to achieve a suitable plan for saving?

Like shorter-term savings you need to decide what you are hoping to achieve so you can find a way to get there. This is your hard-earned cash and you need to ensure it works hard for you and gives you a comfortable retirement. The earlier you start saving, the better chance you have of building up a decent pot. The benefits of compounding interest – where you earn interest upon interest over the years – is like turbocharging your investment.

Figures from Canada Life show if you start saving 15% of a £25,000 salary at age 20, you would accumulate a pension pot worth around £349,242 by the time you reach age 67.

Wait until you are 40 before you start saving and the same level of contributions would give you a pension pot worth around £153,211 – less than half.

A third of people have no clue how much they have in their pension pot

GOALS

EARLY

What sort of income do you think you’ll need during your retirement?

Experts say we should aim for 70% to 80% of our pre-retirement income but basically it depends on the type of lifestyle you want once you give up the daily grind. Once you get an idea of this you can then plan how you will get there. The

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