Are you making costly mistakes with your pension that could leave you struggling in retirement? According to a leading financial expert, many Britons are unknowingly jeopardising their financial future through simple errors that could easily be avoided.
The Three Golden Rules for Pension Protection
Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown, has identified three crucial areas where people frequently go wrong with their pension planning. Getting these right could make the difference between a comfortable retirement and financial hardship.
1. Don't Let Your State Pension Slip Through Your Fingers
"One of the biggest mistakes people make is failing to check their National Insurance record," Morrissey warns. "You need 35 years of contributions to get the full new State Pension, but gaps can easily occur if you've been unemployed, caring for family, or ill."
Many people assume their contributions are automatically tracked and updated, but this isn't always the case. Checking your record regularly and filling any gaps could be worth thousands of pounds over your retirement.
2. Track Down Your Lost Pension Pots
With the average person now having multiple jobs throughout their career, it's surprisingly easy to lose track of pension savings. "People change jobs frequently and small pension pots from previous employers can get forgotten," Morrissey explains.
The Pension Tracing Service can help you locate these lost funds, potentially uncovering significant sums that could substantially boost your retirement income.
3. Understand Exactly What You're Paying For
High charges can silently eat away at your pension pot over decades. "Even a small difference in charges can have a massive impact on your final pension pot," Morrissey emphasises.
She recommends regularly reviewing your pension statements and understanding exactly what you're paying in fees. Sometimes moving to a provider with lower charges could save you tens of thousands of pounds by retirement.
Take Control of Your Financial Future
Morrissey's advice comes at a critical time, with many people feeling anxious about the cost of living crisis and its impact on their retirement plans. By taking these simple steps now, you could secure a much more comfortable retirement and avoid the common pitfalls that catch out so many people.
"Being proactive about your pension might not be the most exciting task, but it could be one of the most financially rewarding things you ever do," Morrissey concludes.
