Take The Time To Take Back Control Over Your Retirement Savings
With all that has been happening in the world this in 2020, for many people it’s been really difficult to feel as though they’re in control of much. However, a lot of people have been in the fortunate position of being able to take the opportunity to invest in both their physical and emotional health while in lockdown.
Worryingly, though, research suggests that many people might have overlooked their future financial health as result of the coronavirus (COVID-19) outbreak. So as life begins to go back to normal, now is a good time to take back some of that control, starting with retirement savings.
Time To Review And Better Organise Finances
Establishing financial security is a vastly crucial goal, but it does not happen overnight. We need to encourage good financial habits over our lifetime to sustainably grow and maintain our retirement nest egg. All of our financial decisions and activities ultimately have an effect on our financial health.
For those who spent their entire lockdown working from comfort of their home, some may have been able to make financial savings as a result. Some employees, including furloughed employees, will have been entitled to employer pension contributions that may now require reviewing. People entering or approaching retirement in 2020 really need to carefully plan how and when to access their pension in order to maximise annual allowances and tax-free benefits.
More Badly Organised Than Before The Pandemic
According to the research findings, 21% of people state they have taken time out to review and better organise their finances since the start of the pandemic. The younger generation of 18 to 34 (31%) were more likely to have organised their finances than those aged 35 to 54 (22%) and 55+ (13%), whilst men (23%) are more likely to do this than women (19%).
Just 9% admitted that they hadn’t reviewed their finances and that they were more badly organised than before the pandemic. This was much more likely among men (42%) than women (32%) and also more common among the younger generations, with 49% of 18-34-year-olds compared to 36% among 35-54-year-olds and 28% of over-55s.
10 Tips To Enjoy The Retirement You Want
1. For the previous six months, understandably, people have been focused on the short term. Retirement savings may have been neglected by many
2. Review your spending habits and consider if you have the scope to save a little more each month.
3. Look up your annual benefit statements – you may have saved with more than one employer’s pension scheme.
4. Think about what financial milestones you’d need to reach in order to increase your pension contributions and review your investment choices.
5. Find out more information about your current pension plan. If you pay in more, does your employer also match your contributions?
6. Track down old pension schemes, using the Government’s finder service https://www.gov.uk/find-pension-contact-details or request contact details from the Government’s Pension Tracing Service on 0800 731 0193 or by post.
7. Check that your Expression of Wish form is up to date. This is a request which sets out who you want to receive any death benefits payable on your death.
8. Check your State Pension entitlement. To receive the full State Pension when you do reach State Pension age, you must have paid or been credited with 35 qualifying years of National Insurance contributions. Visit the Government Pension Service https://www.gov.uk/contact-pension-service for information about your State Pension.
9. Add up the savings and investments that you could use for your retirement. A pension is a very tax-efficient way to save up for your retirement, but you may also have other savings or investments that you could use to increase your income when you retire. The help of a financial advisor Leeds would be a very good idea at this point. If you are getting close to your retirement and the amount you’re likely to retire on is less than you had hoped, consider new ways to boost your pension.
10. Decide when to start taking your pension. You should to set a target date when you want to start drawing an income from your pension – and remember you don’t have to stop working to take your pension, but you have to be aged at least 55 (you might be able to do this earlier if you are in very poor health).
Save Now So You Can Spend More Later In Life
If we’ve learnt anything from the COVID-19 pandemic, it is the importance of financial resilience, including having savings for later life. You should save now so you can spend later in life. And make plans now for how you will pay your bills later when you are no longer working will help to avoid panic setting in when you suddenly find yourself retiring.