You’re saving into your workplace pension, and you want to sit back and relax because retirement is a long way away. What can you look out for when checking your workplace pension to make sure you’re staying on track?
Pay in as much as you can
There are many tools out there that can help you figure out how much you’re able to pay in from your salary, taking into account contributions from your workplace. This can help you visualise what your income will look like when it comes to the time of your retirement, enabling you to figure out just how much you will need to pay in to reach your target.
Check with your employer
It’s important to remember that many employers do more than just the bare minimum when it comes to contributing on your behalf – and it’s a good idea to check whether they will do so to avoid missing out. They may offer a “contribution match”, which means that any additional contributions that you make into your pension, they will match (within certain guidelines).
Where is your pension?
It’s also important to check where your pension is actually invested. Most likely, you will be placed in the “default fund” of that pension scheme, which is designed for those who haven’t yet decided where they would like their contributions to go. These default funds are likely to be invested in assets that can tolerate ups and downs of the market due to the members having a while until retirement. When you get closer to retirement, these then switch to investments that are more stable.
When you near retirement, it’s a good idea to review your options to ensure you’re getting what you need from your pension.
Could your pension be better?
Remember – different funds have different levels of risks. If retirement is in the distant future, you’ll have more time to recover from any setbacks or falls in the market, meaning the further away you are it may be a good idea to choose a higher risk investment in the aim to grow your savings.
Pension saving is for the long term, so it’s important to get a good understanding of different funds to get familiar with their risk profiles, ensuring you choose the ones with the best long-term returns.
Don’t worry too much about checking your pension every day. It is, however, a good idea to know how much is there on a regular basis. If you’re looking for financial advice regarding pensions and how they will affect you and your family, talk to our team. Please call on 01926 492406 or email us at email@example.com to make an appointment.