Get the most out of your pension
Your pension needs some love in order to get you to your goal but it needn’t be time consuming.
It can be easy to lose touch with your pension savings as life gets busier. You should try and keep an eye on your pension pot as you get on with other things too. This doesn't mean you constantly have to change things, but it's a good idea to check in regularly to make sure everything is ticking along as you’d like it to.
Life events, like having children or buying your dream house, can have an impact on your finances and can also significantly change your future plans. At this stage of your savings journey, you should be taking some time to think about your investment choices, make sure you're paying enough in and re-evaluate your goals every now and again as your circumstances change.
Have a goal
You may not have thought much about what your retirement might look like yet. That’s ok, you don't need to have a solid plan if you're just starting out, but as you get further down life's road it's useful to have an idea of what different lifestyles might look like and how much they might cost so that you can make sure your savings are working hard for your future.
Thinking about the lifestyle you want and can afford can help you understand how much you need to save, where you can take opportunities to increase this and how long you need to save for.
With so many options, it can feel daunting to think about your retirement but it needn't be a chore. In our Picture your future section we've got some options to help you think this through, from three ready-made lifestyles to our custom lifestyle tool, so that you're more empowered to make your retirement all the more colourful.
Manage your pension savings
You may have several different pensions and savings pots set aside for retirement. You'll see that we refer to both defined contribution pension plans (or pension pots) and defined benefit pension schemes (also called DB, final salary or career average/CARE schemes) in this guide.
These types of pensions are different to each other in many ways including how you can take your retirement income, whether you can choose your own investments or if you can save more.
If you need more help in understanding the types of pension you have, you can learn more about this in Saving for retirement.
The goal of having a pension is being able to fund the lifestyle you want when you come to take your money. It's all about whether you're saving enough and whether you're invested in a way that reflects your current plans.
There are a few things you should try and review on a regular basis.
Look for opportunities to increase your savings
There are many draws on your income; rent, mortgage, bills, food, holidays, but there may be opportunities to increase your pension savings from time-to-time either by increasing what you save regularly or by making one off savings. Such as if you:
- are paid a bonus
- are promoted or start a role with a higher salary
- are made redundant and receive compensation, especially if you start a new role straight away
- receive an inheritance or other windfall
Looking after loved ones
If you were to die before or after taking retirement income, you can tell the scheme who you would like to receive what is left in your pot by nominating beneficiaries. You can usually do this for your Legal & General plan online by logging in to Manage Your Account but you may need to speak to your employer or check your scheme website for details.
If you have other pensions, check with your pension provider.
At retirement, some pension schemes will have retirement income options that allow your money to go to loved ones, they don’t have to be your spouse or civil partner.
You can change your beneficiaries at any time.
It's especially important to think about this if you get married / enter into a civil partnership, divorce or have children.