*AD – This post is in collaboration with Mumsnet & Profile Pensions*
When you think about retirement what’s the first thing that comes to mind?
For me it’s finally losing those Sunday night blues. Going to bed on a Sunday evening knowing that the Monday is mine to do whatever I wish.
Learning a new hobby perhaps – photography, golf, maybe a foreign language? Travelling the world maybe? Booking on a Mediterranean cruise or finally taking a trip to Oz to visit family – something that’s always been put off because of work commitments or the pitter patter of tiny feet. Relaxed mid morning Pilates followed by an afternoon playing tag with the grand kids, combined with lazy mornings in bed reading the paper (if newspapers even exist by then!)
The list goes on.
When we daydream about our retirement, which lets face it at aged 37 feels like an absolute lifetime away, we always think about how wonderful it will be, not for once stopping to think about how exactly we are going to fund this dream lifestyle which we long for. Whether we will actually have enough to live on; whether we have saved adequately enough during our working lives to make the most of every new day we have ahead of us.
We vaguely remember filling out the forms that were passed to us on the first day of our brand new job (and a fair few new jobs after that), ticking the boxes (most likely for the minimum contribution) but if someone asked you how much money your pension would give you each week when you reach retirement, would you even have a clue? Probably not. I
Along with will writing, financial management and healthcare, looking after your pension is a crucial part of getting older!
It’s time for a pensions health check!
What you sow now you will harvest later…
If you’re one of those people who buries you head in the sand every time the words, pensions, savings or retirement are mentioned then you definitely won’t be alone. Even as a HR Advisor (and let’s face it someone who should know better) I haven’t paid nearly half as much attention as I should about saving for my future. I know what pensions I have, and I have the original paperwork. I even file my annual statement away every year (yay me!) but can I tell you how much money I may have? A rough estimate at best. I’ve taken steps in recent years to save more after realising I’d be VERY old to retire comfortably, but in all likelihood, it’s still not enough.
Worryingly, the UK now not only has a gender pay gap, but a gender pension gap too, with many men saving far more adequately for their retirement than women. With women more likely to take time out of the workplace for maternity leave and raising their children, these gaps in employment leave many of us with far less money to live off when we retire. Ironically we also live longer too, meaning our retirements may end up looking far less lavish than the one we imagine!
Why do we resist pensions so much?
I’m not going to try and gloss it – Pensions can be confusing, and unless you have money to spend on a financial advisor, trying to get your head around the topic can be a bit of a minefield. As a result, we push it to the back of our minds, add it to the ‘later’ pile, and tell ourselves that we have plenty of time to think about it. With over 10,000 different pension schemes and 40,000 different funds, combined with the ever changing landscape of pensions (e.g. shifting of retirement age, introduction of auto enrollment) complicated fee structures and big piles of daunting paperwork sent through the post, the lack of knowledge is somewhat inevitable.
What are the risks?
If you are a woman who contracted out of the State pension in the 80s or 90s (and let’s face it, maybe you don’t even know whether you did!) then you are most at risk of having a poorly performing pension. Pension schemes that were set up pre-2000 (before the pension reform changes were implemented by the government) also come with a greater risk of high fees, or your money being invested in funds which are less effective in getting the best return on your money.
If you’ve moved jobs, taken career breaks or started with new employers, chances are you may also have a number of pension schemes with different providers. Add a few house moves into the equation, and you may have lost contact with your providers, meaning ultimately you don’t have the first clue about what money you have or how much it’s projected to provide you on retirement.
What can you do about it?
This is where Profile Pensions comes in…. a whole of market, impartial pension advisor offering accessible advice to everyone, with no cost to sign up and learn more.
Using their pensions health check, Profile Pensions can not only help you track down any lost pensions, but check out how your pensions are performing, with the goal of making all of their customers (over 20,000 to date) be better off in retirement.
Not only do Profile Pensions cut through the jargon and complexity of pensions, but their health check is incredibly simple to use. An easy sign up process with limited personal details required, and a choice of channels for contact (from post, online and over the phone).
As part of their Pensions Health check, they look at a few key areas including:
- Investment strategy – How your money is invested and how that compares against the level of risk you’re willing to take (this is likely to change the closer you get to retirement!)
- Fund manager performance – Seeing how your invested money is performing and the funds track record to see if it’s performing as expected.
- Fees & charges – Checking how much pension fees you’re paying and if the same benefits could be provided elsewhere for less. These small percentages can equate to thousands in retirement.
- Flexibility – When you can access your pension (e.g. whether you can gain access to funds early from aged 55)
- Consolidation – When you have multiple pensions, it may be more effective to combine them into one place. Profile Pensions will check what is best for your personal circumstances and advise accordingly.
Is it worth it?
What if I told you that Profile Pensions can improve 94% of the pensions they review?
That reducing your pension charges by 67% can save you over 11 THOUSAND pounds over 15 years?
That increasing the growth of your fund by just 1% a year could give you £13,659 more towards retirement over 15 years!?
By filling in one quick form, and letting Profile Pensions do all the work, you could be just a few steps closer to getting the retirement you picture in your head. You don’t pay a penny unless Profile Pensions can save you money and you decide to implement their recommendations, and even then, it’s just a small percentage, and far cheaper than the average cost of financial advice.
As an impartial service, you know that the advice you get will be bias free and in your best interests. So what have you got to lose?
How do I check my pensions?
If I’ve convinced you to start a pension health check why not firstly look at how much you may need in retirement by completing the basic pension calculator, then sign up for your pensions health check to see how your pensions are performing and see if Profile Pensions can save you money.
Pensions may never be our favourite topic of discussion, but one thing I know for sure is that the time passes far quicker than we imagine. Whilst I may still feel 18 in my head, and like to think that 30 years ago is still 1970, it’s time to accept that I’m rapidly approaching 40, and if I am lucky enough to reach retirement age, I damn well want to make sure I enjoy every day that I get! By investing just a bit of time now, I can make sure that my pensions are giving me the best return possible when I leave the office for good!
For more information on the benefits of a pension health check please read this useful blog from Profile Pensions to find out more
