Financial adviser Samuel Mather-Holgate has issued a warning for people born in the UK between 1966 and 1976, highlighting costly pension mistakes that could leave them working longer or with less income than expected. Mather-Holgate, managing director and Independent Financial Adviser at Mather and Murray Financial, describes the 50s as the "pension danger zone."
The Biggest Mistake: Procrastination
According to Mather-Holgate, the most significant error is delaying action. "Your 50s are the pension danger zone. You're close enough to retirement that every decision matters, but still early enough to fix mistakes. 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," he said.
Common Errors to Avoid
One major blunder is stopping pension contributions early. 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."
He also warned against relying solely on the State Pension. "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 stated.
Checking Pension Income and Lost Pots
Another frequent error is failing to verify the income existing pension savings 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 said.
He urged individuals to locate forgotten workplace pensions from previous employers. "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," he added.
State Pension Forecast and Tax Implications
Reviewing the State Pension forecast is another simple but overlooked step. "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," Mather-Holgate noted.
He also cautioned against withdrawing pension savings without understanding tax consequences. "Taking money from your pension without proper advice can trigger unexpected tax bills and may even restrict how much you can contribute in future," he said.
Investment Strategy and Retirement Duration
Investment approach requires consistent scrutiny. "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," Mather-Holgate outlined.
Finally, he noted that people often underestimate retirement length. "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 concluded.
