Are you set up for retirement? – Jasmine Birtles

If you’re 45+ and hoping you can wind down your work at some point in the not too distant future, you might have a nagging worry in the back of your mind about whether you will actually have the funds to do it properly.

Frankly, right now many people in the UK really don’t have the money for a decent retirement, but they could do if they know early enough that they need to put more money aside and make use of free help available. 

Here’s your checklist to see what you need to do now to set yourself up for your golden years.

Give yourself a financial health check

Spend an afternoon with your statements – your pensions, investments, savings and bank statements – to see how much in total you have saved up so far. A lot of people find that there’s a bit of a gap between how much they’ve saved and how much they will need to afford the lifestyle they want going forward. This means it’s time to work at cutting down on spending and building up your investments.

Also, try the free ‘Midlife MOT’ app from Aviva which has thirty questions with multiple choice answers that will show you where you’re at with your wealth, health and wellbeing. It then has some suggested actions and links to help you improve on all of those. Worth a go for free!

Put more cash in

How much are you currently contributing to your company pension? You may notice money coming out of your salary every month for your pension but do you know what percentage of your wages that represents? If it’s low, like 5% or 7%, could you afford to sacrifice more for your future? This is particularly important if your employer adds to your pension contributions as you could be missing out on this ‘free money’. Speak to HR about it. 

And consider using bonuses or commission as a pension booster. When you get a bonus or commission payment, ask your employer to use it to make a one-off pension boost through their payroll system. 

Same with your personal pension. You don’t get extra cash from an employer for this but it’s good to review it each year and see if you can put more in each month.

Also, can you put more into ISAs? These act as an addition to your pension. Aim for stocks and shares or innovative finance ISAs rather than Cash ISAs as they tend to be better over the long-term. Take a look at the article from my website here about equities ISAs and how to invest in them, or check out this ISA guide.

Get your pensions together

Check that your contact information is up to date with your pension companies. Have you moved or changed your name recently? What about your email address and phone number? It’s important that you get up-to-date information from them.

Trace old pensions you think you might have. Hunt out any paperwork from former employers and get in touch with their pension providers to see how much you have in those pots. If you’re not sure which pensions you might have, use the free Pensions Tracing Service at Gov.uk. 

Consider consolidating your pensions too. If you are someone with lots of pensions with different providers, consider transferring them all into your current provider. Moving pensions can be complicated so it’s best to pay a financial advisor to do this for you. You can get a totally free financial assessment through VouchedFor and MoneyMagpie if you go here.

If you’re over-50 you can also get free help from Pension Wise, the government service that gives information about the different ways that you can take money from your pension savings. 

Are you going to get the full state pension?

Your State Pension comes from National Insurance contributions (as long as you’ve contributed to National Insurance for at least 35 years). You can check your contributions here. It is possible to ‘buy back’ some years if you didn’t contribute enough to National Insurance so look on that page to find out how to do it.

You can also confirm the age at which you will be able to draw your state pension at Gov.uk.

Over 60? 

If you are in your mid-60s and planning on retiring soon, be aware that you don’t automatically get your state pension. You need to apply for it. Find out how at the Gov.uk.

Complete your “Expression of wish’ in your pension details. This tells your pension company who you’d like your savings to go to if you die before you retire. At the same time, update your will to avoid any doubt.

Also, get some advice before you actually take any money out of your pot. A lot of people think that 25% is how much you should withdraw when you can access your pension because 25% is tax free. But by pulling out all of that they deplete their savings in one go. It’s better to take out only as much money as you need when you need to spend it. 

It’s the same with the state pension. You don’t have to take it at 66 (or 67, 68 or whatever age it is moved to by the time you get to that stage). You can defer it and you might get more money if you do. See more about how to do that at Gov.uk.

Jasmine Birtles is a TV financial expert and runs the self-help money website MoneyMagpie.com.

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here. If you have any questions, please speak to your professional adviser or seek independent specialist advice.