When it comes to planning for a financially secure retirement, understanding your pension contributions is an essential first step.
Whether you’re contributing to a workplace pension or a personal pension product, keeping track of your contributions ensures you keep the right track toward your retirement goals.
But how can you check your pension contributions, and why is doing it so vital for your financial health in retirement?
Why should you check your pension contributions?
In pension planning, staying engaged can be half the battle.
So, taking the time to regularly monitor and track contributions allows you to assess whether you’re on course to achieve your retirement goals with your current level of contribution. If not, it provides a good opportunity to adjust your contributions where needed. This in turn helps keep you motivated to save and offers peace of mind as you plan for the future.
What’s more, mistakes can happen; regularly reviewing your pension contributions to verify any records are correct helps to prevent errors and discrepancies.
Tax benefits are another important reason to pay attention to contributions. Checking contributions helps you maximise these benefits associated with your contributions, as pensions often attract tax relief that can significantly boost your savings.
Steps to check your pension contributions
How you check your contributions will depend on the type of pension(s) you have.
For workplace pensions, contributions are usually detailed on your payslip, which shows your contributions, your employer’s contributions, and any tax relief. If you have questions about these figures, your HR or payroll department can assist.
For personal pensions, your pension provider will send statements that outline contributions and your pension pot’s performance. Reviewing these regularly ensures you stay informed about the progress of your savings.
Many private schemes often have online portals where you can both monitor the progress of your pot’s growth and see your current contributions.
It’s also worth checking your State Pension forecast. To do this, the government has created an official State Pension portal you can visit. Here you can view your National Insurance (NI) record, identify any gaps in your NI contributions, and confirm your eligibility for the full State Pension.
Talk to a professional
If you’re unsure about your contributions or need help planning for retirement, it can be helpful to speak to an independent financial adviser (IFA), like our team at My Pension Expert.
As well as helping you understand key financial concepts like how your pension contributions work, an IFA will offer tailored advice and create a bespoke plan to help you optimise your pension savings strategy. That way, you’ll be on course to achieve the retirement you deserve.