National Pension Awareness Week (September 9-15, 2024), is an ideal time to focus on planning for your future. With longer life expectancies and evolving financial landscapes, your pension is more crucial than ever. While it may not usually be at the forefront of your mind, awareness weeks such as these serve as timely reminders that the decisions you make about your pension can have a lasting impact on your financial wellbeing in later life.
Why National Pension Awareness Week matters
National Pension Awareness Week is designed to encourage people to take a closer look at their pension plans, irrespective of their age or career stage. Whether you’re just starting your career, moving up the ladder, or nearing retirement, there’s always value in understanding how your pension works, how much you’re saving, and how well it aligns with your future goals.
Did you know?
According to recent statistics, only a third of people regularly review their pensions, and many remain unaware of the tax benefits, contribution matching, and potential long-term growth they could be missing out on. With state pensions offering only a basic level of financial support, the importance of a well-planned personal or workplace pension cannot be overstated.
The current landscape: Why act now?
This year has brought many changes to pension regulations and investment opportunities. With the state pension age rising and fluctuations in the global economy, relying solely on the state pension could leave many struggling in retirement. Now is the time to take control of your pension planning.
Several developments in the pension world make it essential to stay updated:
- Flexible contribution options: Auto-enrolment has made it easier for employees to save, but are you contributing enough to secure the retirement you envision? Reviewing your contributions and increasing them whenever possible can make a significant difference over time.
- Tax efficiency: Pensions remain one of the most tax-efficient ways to save for the future. Contributions may be eligible for tax relief, and investment growth within pensions is typically tax-free. Understanding the tax benefits available can help you maximise your savings.
- Sustainable investment choices: With environmental, social, and governance (ESG) considerations becoming more prominent, many pension providers now offer funds that align with ethical investment choices. By reviewing your pension, you can ensure that your investments align with your values while also potentially benefiting from growth in sustainable industries.
Top pension planning tips for 2024
- Start early, but don’t panic if you haven’t
The earlier you start saving into a pension, the better, thanks to the power of compound interest. However, if you’re closer to retirement and haven’t saved as much as you’d like, all is not lost. You can take steps now, such as increasing your contributions, consolidating old pension pots, and seeking professional advice. - Track your pensions
In today’s workforce, it’s common to have several jobs throughout your career, which can lead to multiple pension pots. Tracking and consolidating your pensions can help reduce fees and make it easier to manage your savings. - Know your retirement options
Pensions now offer more flexibility than ever. From drawdown options to lump sums, it’s important to understand your choices at retirement age and how they will affect your income and tax liabilities. - Consider professional advice
The pension world can be complex, and professional financial advice can be invaluable. A financial advisor can help you review your current pension, provide insights into investment options, and create a roadmap for achieving your retirement goals.
Looking ahead: Securing your financial future
Planning for retirement might seem daunting, but taking small steps today can lead to significant rewards tomorrow. By reviewing your pension regularly, understanding the benefits available, and making informed decisions, you can build a more secure financial future.
This Pension Awareness Week, take the opportunity to sit down, review your plans, and make any necessary adjustments. After all, it’s not just about saving for retirement – it’s about saving for the lifestyle you want in the years ahead.
