9 New Year Pension Resolutions

Resolving to prioritise your pension as we enter 2021 will safeguard your financial future and give you one less thing to worry about. Not sure where to start? Find out how to go about it by following our nine new year pension resolutions.

Increase your pension contributions

This month, hit the ground running by increasing your contributions for 2021. If you haven’t set up a pension yet, speak to a financial advisor to get you started then establish a manageable amount you can contribute each month.

If you’re already putting money into your pension every month, up the ante by adding more than you did last year. Calculate your outgoings, decide on a realistic increase for this year, and then stick to it every month.

Think about consolidating your plans

Consolidating your pension means combining all of your pension funds into a single pot. If you’ve had a pension with various employers, you will have different amounts saved up with each one, and you may have set up personal pensions as well.

By bringing all of your separate pots together and having all of your retirement pots in one place it can be easier to manage and plan out your retirement.

Check your investment risk

Everyone is comfortable with a different level of risk – have you assessed your investment risk profile yet?

Your risk profile depends on factors like your age, your income and your outgoings, so it’s personal to all of us.

By becoming aware of your investment risk profile, you can make better decisions about your pension and map out a plan that’s right for you.

If you’re unsure how to understand your risk appetite or work out your investment risk profile, we’d be happy to do this for you.

Review your charges

Whatever kind of pension you have, it’s likely to be subject to management charges. Every pension fund differs, so you may be paying more than you need to.

Reviewing your pension charges will help you understand how much you’re paying out and what this gets you. Once you have this information, you can decide if it’s the right package for you or explore the possibility of moving your savings into a fund with lower fees.

Understand your death benefits

Death benefits are the payouts that come from your pension, life insurance policies or any annuities you have when you die.

Your pension fund will usually pay out a lump sum to your next of kin or dependant when you die.

As each scheme offers different death benefits, it’s wise to understand how your chosen fund works and what will happen to your money in the event of your death.

Having someone nominated can really speed up the process and makes sure your family gets the money quicker and is one less thing to worry about.

Look into salary sacrifice

Many employers offer a salary sacrifice scheme which enables you to reduce your take-home wage and pay more into your pension each month instead.

There are many benefits to this arrangement, as it’s automatic and can be a tax-efficient way to manage your pension contributions.

If you’re unsure whether your workplace offers a salary sacrifice scheme, speak to your employer to see if this could be a good option for you to look into this year.

Check out Pension Wise

Of course, you’re sure to have many questions about your pension if you’ve pledged to prioritise it this year.

One useful tool for understanding your options is Pension Wise, a free government service to help individuals manage their pension.

As well as offering impartial advice, it covers the tax implications of different pension schemes to help you understand your position and formulate the best plan for your retirement pot. Find out more here.

Discover your state pension entitlement

Planning for your retirement isn’t just down to you and your employer. As you’re also entitled to a state pension, now could be the ideal time to look into how much you can expect to receive from the government when you retire.

The government website allows you to check your state pension forecast and access handy information about when you can start receiving funds and how you can increase your state pension entitlement.

While the basic state pension in the UK is currently £134.25 per week, there are ways you can increase your entitlement.

Speak to a financial planner

If 2021 is your year to prioritise your pension, a financial planner can help you plan out your retirement, meaning you could retire earlier than expected and with the financial freedom to enjoy all those years of hard work.

Take all of the uncertainty and confusion out of the pension planning process when you access impartial, expert advice tailored to you and your financial circumstances.

Financial Affairs is a team of financial specialists who can help you map out a clear, realistic and practical plan for managing your pension and making the most of your retirement. To book a free pension planning consultation, contact us on 01282 452255 or hello@financialaffairs.co.uk

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