It’s also possible that you’ve lost track of some of the pensions you saved into many years ago. The company may have changed its name or merged with another one, been taken over or closed down, and you don’t know whom to contact. If you are wondering whether or not your pension is working for you, there are a number of key questions to answer:
What sort of pension do I have?
There are many different types of pension – workplace pensions and private pensions that you have arranged yourself. Generally speaking, workplace pensions come in two forms – a final salary scheme in which the pension and its benefits are guaranteed; and a money purchase scheme, where the value of your fund is not guaranteed.
2. When do I want to retire?
If you are planning to retire in the next few years it’s vital to work out which pensions you hold, how much you’ve saved into them, and what you can expect to receive when you do stop working. If you are 10 years or more from retirement it is also important that you know how much you are saving and where your pensions are. If there is a potential shortfall you still have time to make extra contributions or merge small pensions into one pot to make them easier to manage.
3. Have I saved enough?
You can ask your pension provider for a forecast, which will help you gauge whether your pension fund is on target to meet your needs when you reach retirement age. You might need to have a pensions review, which will look at all of your pension funds and estimate what the total income might be in the future.
4. Do I need to contribute more?
When you have a clear picture of what you have saved so far, you can start to think about whether you might need to top up your contributions. A pensions advisor can help you decide which is the best home for your savings and how much you can afford to pay in each month. Your current employer may also have a scheme that enables you to increase or top up your contributions, either as a larger monthly amount or as a one-off lump sum payment.
5. Could I have any other lost pension?
If you’ve changed jobs several times, you may have lost track of some of the pension schemes you were enrolled in when you first started work. You may not have a lot of money in such funds, but added together they could make a difference to your long-term savings. The first step is to find any old paperwork that lists the last known details and contact numbers of your pension funds. An outside company or agency may manage your pension so the contact details may not be the same as your old firm’s. If you don’t have any relevant paperwork, a pension tracing service could help you track down the information.
Lots of things to think about there but don't worry if it feels like too much. We are here to help! Our free pension tracing and pension review service is simple and risk free first step in taking control of your pensions.