HOW TO MAKE THE MOST OUT OF YOUR RETIREMENT FINANCES
START PLANNING AT LEAST FIVE YEARS BEFORE YOU AIM TO RETIRE
GET a state pension statement so you know when you’ll get your state pension and how much it will be. Check it again as you head towards retirement. Visit gov.uk/check-statepension or contact the Future Pension Centre on 0800 731 0175.
WHY YOU MIGHT NOT GET THE AMOUNT YOU EXPECT
THERE may be a figure for Contracted Out Pension Equivalent (COPE). This means you were contracted out of the old state pension system. You would have paid lower national insurance contributions and that’s why you receive a smaller state pension.
It may not be clear that your private/workplace pension includes a contracted out element. This is what is causing a lot of confusion for many people as they had no idea this had happened during their working life, or the long-term effect.
CHECK PRIVATE AND WORKPLACE SAVINGS
KEEP an eye on annual statements so you know how your pension pot is doing and what you’re on track to get when you retire.
Also, keep an eye on how the funds are performing to ensure the risk element is right for you.
ANY OTHER INCOME?
TRACK down any old or forgotten pension pots via the Pension Tracing Service at gov.uk/findpension-contact-details. Find lost cash languishing in old bank accounts or Premium Bonds via mylostaccount.org.uk.
CHECK YOUR NATIONAL INSURANCE
IF you have any gaps in your NI record, work out whether it will be cost effective to pay extra to fill them.
Will the resulting boost to your pension income be worth the price of those contributions?
Ensure you get NI credits you may be entitled to if you receive carer’s allowance, perform jury service, live abroad with a spouse or civil partner in the military, receive child benefit, or have signed on as unemployed but did not claim benefit.
If you consider paying top-up voluntary NI contributions, be aware you will have to stump up cash and it could take years before you get back what you paid out.
Visit pensionsadvisoryservice.org. uk/about-pensions/the-state-pension/voluntary-ni-contributions
INCREASE WORKPLACE PENSION CONTRIBUTIONS
MANY firms will match your contributions up to a certain percentage of your salary – above the basic minimum levels, 3% from you and 2% from your boss, rising to 5% from you and 3% from your boss in April.
DELAY YOUR STATE PENSION
YOU can defer taking your state pension. Every nine weeks’ delay equals a 1% increase in income – just less than 5.8% for every full year.
KNOW YOUR OPTIONS
USE your free Pension Wise appointment, from age 50, to look at your options. Visit pensionwise.gov. uk or call 0800 138 3944. The Pensions Advisory Service (pensionsadvisoryservice.org.uk) also offers guidance on pensions.
GET PROFESSIONAL ADVICE
A QUALIFIED financial adviser can provide bespoke advice. It will cost you, but this could be easily offset by savings you could make.
AVOID CROOKS
THE pensions cold-call ban means firms can no longer call you out of the blue about your pension savings. But still be wary of calls, emails and texts offering investment opportunities. Check the Financial Conduct Authority’s website (fca.org.uk) to ensure a firm or adviser is regulated, and for the latest scam alerts.