…and by financial future, we’re talking pensions – but don’t switch off! The word pension often sends people running for the hills, but that’s why we are asking you to consider your ‘financial future’ and not ‘pension’. What does your financial future conjure up? It’s more than likely the types of things that you consider when formulating your lifestyle financial plan – holidays, time (and money) to enjoy hobbies, your home, car, etc. Essentially, the ‘good things’. What does the word pension bring to mind though? Most likely, you relate it to money going out, or an annoying expense; a.k.a. ‘the bad things’.
By considering your financial future now though, at whatever your age, you can learn to see your pension as a gift that can set you up for the lifestyle you truly desire when you retire, rather than a curse – and now that you can see it that way, we can refer to it as a pension once again without scaring you.
There’s enough in life to worry and stress about, but your pension doesn’t have to be one of those things. If you are employed, it’s likely that your employer will have had to set up a workplace pension for you, in which case your contributions will come straight out of your salary. This is really the best way to do it as you can learn to view it as just another expense, like a household bill or car insurance – something that simply comes out. It’s far more difficult to receive the money and then place it aside, so if you are self-employed then our advice would still be to pay yourself, and your pension, before you sit down and see what you have left for the month.
With a workplace pension your employer will also put money in for you and you get tax relief on what you save, so there are even more benefits to making the effort to contribute what you can each month. It may even be – depending on your employer – that if you put in more money, they too will put in more.
Many of you will already have a pension, in which case you might assume that everything is fine ticking along just as it is. If you’ve had more than one job, which is not uncommon in this day and age, you might even have multiple pensions that are building their own little pots in different places. If this is you, then the good news is that you might discover they are worth more than you thought. If you’ve changed employers, or changed address, it’s worth tracking any part pensions down and getting recent statements so you can see what you have.
You might be happy having multiple pensions and combining pensions isn’t always the best thing. Older pensions may have valuable benefits and we can’t guarantee that you will have a better pension as a result of bringing them all together, but it can be easier, particularly if your multiple pensions are all in quite small pots, to transfer them all into one main pension plan that is easier to manage. With just one pension provider, you will only have one set of charges and you will be in a better position to keep track on how it’s performing.
If you’re confused about pensions or would like further advice on how to manage your pension, please get in touch and help us take the fear out of what can actually be a very liberating and stress-free look towards your future.
This article does not constitute financial advice and should not be construed as such.