Have you exhausted your list of lockdown chores yet? Why not consider taking a look at your pension planning?
According to the ABI, there are around 1.6 million unclaimed pension pots worth £19.4 billion. That’s an average fund size of £13,000.1
Many people forget to tell their pension provider their new address when they move, so it’s no wonder that it’s easy to lose track of numerous pensions. The ABI’s research found that only 4% would tell their pension provider when they moved house, compared to 89% notifying their GP or dentist about this.2
While it’s nothing major to worry about, it really is worth knowing where your hard-earned money goes, and there are tools which can help. For example, there is a pension tracing service – from the Government – that could help you to track down an old pension.
But a great way to start to demystify your pensions would be to make a list of everything you have and who manages it.
A state pension projection can also help you see what you can expect from the state and when: https://www.gov.uk/check-state-pension
Assessing how your money is invested
Once you have a list, why not take a look at how this money is invested? Most people I work with don’t know what their pension funds are invested in, when we first meet. And considering that your pension is likely to be one of your bigger assets, this is quite astounding.
Many pensions are invested in what are known as ‘lifestyle funds,’ these are designed to de-risk your pension planning when you’re closer to retirement. However, often the date they de-risk doesn’t match the date that clients plan to retire. Reappraising how your pensions are invested can be a great place to start in making sure you’re likely to meet your objectives.
Have you considered using your pension fund as a force for good?
There’s been a lot in the news of late about environmental sustainability and doing ‘our bit’ for a more circular economy, and responsible investment can help you to meet your financial objectives in a world worth living in.
The truth is that the negative economic impact of climate change is increasing, and we need to do something about it, in order to conserve our planet, and protect or enhance our wealth.
In fact, allocating investments in a mindful manner can be part of a holistic approach to a sustainable lifestyle. For instance, moving your pension can be 27 times more efficient at lowering your carbon footprint than other activities such as shorter showers and flying less, combined. In essence, together we have scale and influence on businesses.3
When it comes to pension planning, it’s important to consider your finances in the long term. Do you know whether you are on track to meet your income needs in retirement? If you have a gap how will you meet it?
Working with a financial planner can really help you start to make sense of all of this and make sure you have a plan to meet your needs when you stop work.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
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