Taking an active interest in your retirement savings

Millions of savers currently spend very little time reviewing their pensions, with more than a quarter of savers (28%) admitting to never reviewing their retirement savings, while almost a fifth (19%) of those with a pension said they review it less than once every five years[1] according to figures released by Aviva.

Gender also has a role to play. The number of women who are not engaged with their pension is particularly high, with almost a third (32%) saying they never review their savings, compared to a quarter (25%) of men.

Most people have no idea what their pension is worth

Worryingly, Aviva’s figures show that only just over a quarter of people (27%) think that their current contributions into their company pension scheme will provide enough for them in retirement[2]. Ask most people what they earn now and they’ll have a pretty good idea, sometimes down to the penny, but most people have no idea what their pension is worth.

The figures show that urgent action is needed to encourage people to take an active interest in their retirement savings. While the number of people reviewing their pension is worryingly low, the research shows that the main thing that does cause them to act is the arrival of their annual pension statement.

Regularly check how our pension is performing

Investment funds rarely continue to perform well year after year, so it’s important to regularly check how our pension is performing. In addition, over time the amount of risk many of us are prepared to accept in our investments typically tends to reduce, to the extent that by the time we’re close to retirement we may not wish to take much risk at all.

The closer you get to approaching retirement, the more important it is to know how your pension fund is performing. If you wait until your retirement, the chances are you will have no idea what income you will receive, and then it’s too late to make any changes. The longer you have to prepare for retirement, the much greater chance you have of doing something about it and achieving a comfortable retirement.

Contributions should keep pace with our income

As part of a year-long study into people’s financial habits, consumers were asked which events had caused them to review their pension. The most popular answer was receiving an annual statement from their provider (35%), followed by a pay increase (28%) and starting a new job (17%)[3].

Want to make more of your retirement?

Retiring is a huge moment in anyone’s life. If you are thinking about your retirement (and what you want to achieve from it), please contact SFIA Group Ltd on 01628 566777 or email colin_a_sanders@yahoo.co.uk to discuss your situation and the options available to you.

Source data:

[1] Friends Life (now part of the Aviva group) survey of 9,498 people in the UK with a pension, carried out by YouGov (Jan–Dec 2015)

[2] Friends Life (now part of the Aviva group) survey of 3,618 people in the UK who contribute to a company pension, carried out by YouGov (Jan–Dec 2015)

[3] Friends Life (now part of the Aviva group) survey of 2,347 people in the UK who have reviewed their pension, carried out by YouGov (Jan–Dec 2015)

A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.