Pension Planning Tips
Starting early, contributing consistently, and reviewing your pension regularly are the cornerstones of a healthy retirement plan. Here are the key steps to take.
Effective pension planning doesn't need to be complicated. A few key habits can make a significant difference to your retirement income.
Start as early as possible
Time is your greatest ally. Thanks to compound growth, money invested early has far longer to grow. Someone saving from age 22 will typically retire with considerably more than someone who starts at 40, even if the later starter contributes more each month.
Increase contributions when you can
Every pay rise is an opportunity to increase your pension contribution. Even a 1% increase can have a substantial effect over decades. Many workplace schemes allow you to change contribution levels easily online.
Review and consolidate old pensions
The average person has around 11 jobs in their lifetime, leaving behind multiple pension pots. Tracking down and consolidating old pensions can reduce fees and make your retirement savings easier to manage.
Consider your investment mix
Younger savers can typically afford to take more investment risk, with a higher proportion in equities. As retirement approaches, gradually shifting to lower-risk assets (lifestyle profiling) can protect the value you've built up.