Usually around this time of year, Britons tend to bring out the feather duster and kick start a spring-cleaning frenzy. However, whilst many take a great deal of care to tidy out their homes, wardrobes, and cupboards, their finances can be somewhat neglected.
This is understandable. After all, managing finances – particularly retirement finances – can sometimes feel like a chore. But the benefits of regularly reviewing and updating them are countless, especially when it comes to retirement planning. Taking a thorough look at our savings, spending habits, and financial goals is crucial for achieving a comfortable retirement.
So, here at My Pension Expert, we’ve put together some top tips to help people spring-clean their retirement finances…
- 1. Organise income and expenses
A good place for any saver to start is to get to grips with their current financial situation. It’s been a tough financial year for many, and with prices of household bills and daily essentials seemingly on a constant uphill trajectory, it’s important people take into where they currently stand. This will involve making a note of and reviewing existing incomings and outgoings as well as the amount a person has saved into their pension and the value of their investments. In doing so, Britons will begin to gain a better understanding of their situation.
Clearing or reducing outstanding debts is a great way to free up more money to put towards retirement savings. If debts can’t be paid off right away, then savers should consider creating a clear and realistic debt repayment plan that they will be able to stick to.
- 2. Track down lost pension pots
Multiple job changes over a person’s career can make it difficult to keep track of pension pots. There is an estimated £19.4 billion in lost pension pots in the UK. So, it’s worth using the government’s pension tracker to assist with tracking down any lost pensions. Savers should consider consolidating their retirement savings into one easy-to-manage pension.
- 3. Consider retirement goals
It is important for individuals to review their pension plan regularly to ensure that it remains on track to meet their retirement goals. It is useful for people to consider how they want to spend their retirement; for example, My Pension Expert’s own research found that 71% of Britons want to make sure they have enough money to pursue their interests and hobbies in retirement, whilst over half (54%) dream of travelling and seeing the world. Once people have a clear goal in mind, it will become easier to understand how much they need to save. So, it would be wise to check if they are contributing enough to their pension and evaluate whether they are on track to achieving their dream retirement.
- 4. Consider automated savings
Automating savings can be a great way for savers to stay on track with their retirement goals. Most employees are automatically enrolled into a workplace pension scheme; however, for those that are not, setting up a regular transfer to a pension can help ensure that they are consistently contributing to their retirement, without the hassle of a manual transfer.
- 5. Get to know different financial products
With numerous financial products on the market, it’s worth exploring the various options to identify which might best suit savers’ needs. Whether it’s flexible access drawdowns or annuities (to name a few examples), different products are designed to align with the unique retirement goals and needs of each person. Importantly, however, there is no ‘one-size-fits-all’ solution. Selecting the right product can be challenging. Therefore, it’s important to take note of the following tip.
- 6. Seek professional expert advice
It’s always a good idea to seek the advice of a professional financial adviser to help guide you with the above. An independent financial advisor, such as our team at My Pension Expert, can provide an assessment of a savers’ financial situation, the level of risk they feel comfortable taking, and retirement goals. From there, they can make tailored recommendations to help people strengthen their retirement strategy with a product or scheme which is suited to their needs.
Financial planning is an ongoing process, and regular reviews are crucial for ensuring that retirement plans stay on track. However, with the many demands of daily life, it’s easy for financial planning to fall by the wayside. So, a little spring cleaning of retirement finances – particularly with the help of an independent financial adviser – can go a long towards re-establishing a steady course to one’s dream retirement.