Financial adviser Samuel Mather-Holgate has warned that people born in the UK between 1966 and 1976 are at risk of making costly pension mistakes that could delay retirement or reduce their income. Mather-Holgate, managing director and Independent Financial Adviser at Mather and Murray Financial, said the 50s are a critical decade for retirement planning.
Procrastination Is the Biggest Risk
According to Mather-Holgate, the most common error is delaying pension reviews. “Your 50s are the pension danger zone. You're close enough to retirement that every decision matters, but still early enough to fix mistakes,” he said. “The biggest mistake of all is procrastination. Every year you delay reviewing your pension is another year you've lost the opportunity to improve your retirement.”
Stopping Contributions Too Early
Another major mistake is reducing or stopping pension contributions prematurely. Mather-Holgate explained: “Some people reduce or stop paying into their pension because retirement feels close, but if you're still working you're potentially walking away from valuable employer contributions and generous tax relief. That can be an expensive decision.”
Overreliance on State Pension
Many retirees assume the State Pension will be sufficient, but Mather-Holgate cautioned against this. “The State Pension provides a valuable foundation. But it was never designed to fund the lifestyle most people hope to enjoy in retirement. Relying on it alone is risky,” he said.
Ignoring Future Income Projections
A further oversight is failing to calculate the actual income a pension pot will generate. “Many people know the value of their pension pot, but have no idea what income it might provide. That can leave people sleepwalking towards a shortfall and discovering far too late that they may need to work longer than they expected,” Mather-Holgate noted.
Lost Pension Pots and National Insurance Gaps
He urged savers to track down forgotten workplace pensions from previous jobs. “Many savers have several pension pots scattered across different employers. Those pensions represent money you've already earned, but people often lose track of them or leave them invested in arrangements that no longer suit their needs.” Checking the State Pension forecast is also essential, as gaps in National Insurance records can reduce entitlement. “Gaps in your National Insurance record can reduce your State Pension entitlement, but in many cases they're straightforward to identify and, where appropriate, fill,” he added.
Tax Consequences and Investment Strategy
Accessing pension savings without understanding tax implications can trigger unexpected bills. “Taking money from your pension without proper advice can trigger unexpected tax bills and may even restrict how much you can contribute in future,” Mather-Holgate warned. He also advised regular reviews of investment strategy: “Taking too much risk can expose your retirement savings to unnecessary volatility, while taking too little risk too early can leave your pension struggling to keep pace with inflation. Your pension still needs growth, but it also needs protection as retirement approaches.”
Planning for a Long Retirement
Finally, he emphasised that retirement can last decades. “It's perfectly possible to spend 25 or even 30 years in retirement. Your pension doesn't just need to get you to retirement. It needs to keep supporting you throughout it,” he said.
