Are you saving for your pension? Even if you haven't been putting money aside for long, hopefully the implementation of automatic enrolment means you're well on your way to building a suitable pot that you can turn into an income for retirement. However, it's just as important to know how big a pot it is that you're accumulating – if you don't, you may get a shock when it's time to retire.
Unfortunately, research from Partnership has revealed that a worrying number of people are unprepared for retirement, as not only are savings levels low, but many people have no idea how much they've got saved in their pension pot.
In fact, when asked how much they anticipate their workplace pension scheme to be worth when they retire, 35% of people aged 45 to 64 said they didn't know, and 21% admitted they didn't have anything saved at all. These results didn't improve among those closest to retirement, as 35% of 55-64 year-olds didn't know how much their workplace pension was worth, and 20% were unaware of their private pension's total value, too.
Respondents were equally as unaware when it came to their other savings vehicles, with 25% not knowing the full value of their easy access savings, while a similar number (24%) didn't know how much their fixed term savings were worth. Not only that, but a further 28% had no private pension, suggesting that many could become reliant on the state in later life.
This is particularly worrying given the age group in question. Those just starting on the career ladder have decades left to build up a suitable pension, while those closer to state pension age could find that they run out of time, which means that they could be facing a serious income shortfall in retirement.
"Planning for the various retirement eventualities is hard enough when you know exactly how much you do have, but it is likely to be almost impossible if you don't even know that," said Andrew Megson, managing director of Retirement at Partnership.
"While it may take a little time, getting a better understanding of the value of your total assets will allow you to take practical steps to improve your retirement before it is too late. Lack of preparation can mean that people's choices are restricted, and they may need to make some very difficult decisions at retirement."
Don't run that risk. If you've yet to start a pension, make sure to sign up to your workplace scheme (if applicable) as soon as possible, as that way you're giving your pot plenty of time to build up. And, if you've been saving for years, make sure you know how much your pension is worth!
Keep a close eye on your pension statements so you know how your funds are performing, and if necessary, make a few changes here and there – be it through changing what you're investing in or making larger monthly contributions, and make sure to seek professional advice – to have the best possible chance of securing the retirement income you need.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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