It’s really important that you take control of your retirement planning, no matter what your age. Retirement might feel far away, but with every year that goes by you’re getting closer to it.
The cost of living is also getting more expensive, so it’s essential that you understand how much your retirement could cost and that you plan ahead, to see if your pension savings are enough to cover it.
Taking some small steps now could make a huge difference to the lifestyle that you’re able to afford in retirement, and this checklist is here to help you on your way.
1. Register for an online account, if you haven’t already
Planning for retirement has never been easier with your online account. Register for a secure online account to view your personal pension information and manage it easily online. It’s free to register, and it only takes a few minutes.
2. Update your contact details
It’s important that we always have your correct contact details, so if we need to contact you about your pension, we can do it quickly. If you change your email address, get a new phone number or move house, let us know straightaway.
3. Make your death benefit Expression of Wish
A lump sum of money could be paid to your loved ones if you die before you claim your pension benefits. By completing an Expression of Wish form, you can say who you’d like the money to go to.
Your ENW pension is currently considered separately to the rest of your estate, and isn’t covered by your will. Completing an Expression of Wish form could help to avoid a lot of unnecessary stress for your loved ones, and prevent delays with the payment being made.
You can complete an Expression of Wish form when you log into your online account. It’s important that you keep your wishes up to date regularly, as the person or people you wished to get the money previously may not be the same people you’d choose today.
4. See how much you’ll need in retirement
You might have an idea of the things you want to do in retirement. Thinking about the lifestyle that you want when you stop working, and having an idea of how much it might cost will give you a target to aim for with your pension savings, and help you to see if your pension is on track to reach it.
- Think about the standard of living that you want
The Retirement Living Standards (RLS) can give you a general idea of the income you might need when you retire, depending on the lifestyle that you want. You can find more information on the Retirement Living Standards website.
It’s important to remember that the RLS figures are based on a target income after tax and don’t include mortgage, or rent costs. You can add your personal living costs using the Lifestyle Calculator, as shown below.
- Get a personalised estimate of how much you might need
The Lifestyle Calculator gives you a personalised estimate of how much you might need when you retire, after tax. It uses the RLS above as a starting point, and lets you add your individual living costs, such as transport, housing and holidays. You can find the Lifestyle Calculator on your member website.
When you think about how much money you might need when you retire, remember that your retirement income may be taxed. When you take your ENW pension, it will be included in the amount of your income that can be taxed. You can get an estimate of your income after tax, based on current tax rates, at Gov.uk.
5. Check how much you’re likely to get in retirement
It’s so much easier to plan for your future if you know what your income might be when you retire. When you know how much you’re likely to get, you can then work out whether it will cover your expected costs.
- Request pension estimates
You can request a free estimate of your pension benefits to see how much you’re likely to get when you retire, and the options you have at a retirement date of your choice. You can request an estimate of your pension in your online account.
6. Think about your other sources of retirement income
Your State Pension, savings or investments could help you reach your savings target. Find out what they’re likely to be worth and add them together, to see how much retirement income you might have in total.
If you’ve changed jobs you might also have other pensions, or you may have had a private pension. The Pensions Tracing Service can help you track old pensions down if you’ve lost their details.
7. Pay more in, if you can
Paying a little extra on top of your regular pension contributions when you can, while you’re working, could mean you’re able to have a more comfortable retirement. It might even mean you can take more money as a lump sum, or pension when you retire.
Find out more about AVCs here.
8. Take financial support and advice
If you’re making a big decision about your pension this year, or at any other time, you might want to consider taking financial support and advice. Speaking to a financial adviser could have an upfront cost, but it may help you in the long run, to make the right decision for your circumstances. There’s also free financial guidance available.
Watch out for pension scams and fraudsters. They often pose as advisers, but they’re actually out to steal your pension savings.
There’s more information about how to spot a scam on the pension scams page, and you can find a list of trusted advisers and experts at Unbiased.co.uk.