Create Better Savings Habits this Pension Awareness Week

It’s Pension Awareness Week, an important time for savers across the UK to take a hard look at where they stand with their pensions and preparation for their retirement years. To help put people on the right track, Lily Megson, the Policy Director at My Pension Expert, has compiled a guide to creating better pension habits.

Fully engaging with pension planning is a vital part of securing a comfortable retirement, and yet many people fail to do so. While reasons for this vary – feeling overwhelmed and under-supported, over-relying on workplace schemes, or simply procrastination are all leading factors – a lack of proper planning can have powerful consequences in retirement, even leading to financial hardship.

While more support is certainly needed from both the government and the financial services sector to improve pension engagement, there are habits savers can start building themselves today to ensure strong financial health in retirement.

Creating better pension habits: top tips for savers

1. Set clear goals
Setting clear savings goals is the first step in building a solid retirement plan.

Start by calculating how much money you’ll need in retirement to maintain your desired lifestyle, considering factors like daily living expenses, travel plans, and any hobbies or activities you want to pursue.

This gives you a tangible goal to work towards, which can help keep you motivated and focused on your financial journey. It also allows you to monitor your progress and make necessary adjustments – for example, whether you might need to increase contributions or explore different investment options.

With a clear end goal in mind, you can make informed decisions and stay engaged with your savings plan.

2. Check in on your pot regularly
According to My Pension Expert’s research, one-sixth of UK employees with a workplace pension have never checked how much they have saved, a lack of engagement that could lead to financial insecurity for many in retirement.

To avoid this, make it a habit to check your pension statement regularly – ideally at least once a year. This will help you understand how much you have saved, where it’s invested, and whether you are on track to meet your retirement goals, motivating you to keep saving.

3. Boost your contributions where possible
Naturally, larger contributions lead to larger pension pots and more security in retirement.

So, if you can afford to, consider increasing your pension contributions. Even a small increase, particularly early on in life, can make a big difference over time due to the power of compound interest.

Taking advantage of employer matching schemes, where your employer matches a percentage of your contributions, is a good idea too. Essentially, this is free money towards your retirement.

4. Make the most of your options with professional advice
Everyone’s financial situation is unique, and there’s a huge range of investment and pension product options out there for pension planners, some of which could potentially meet your needs better than your current portfolio.

So, taking the time to understand these choices and consider whether they align with your goals is key. To simplify this process, speaking to an independent financial adviser (IFA) could be useful. An IFA can help you unbiasedly navigate the complexities of these different pension products and create a tailored plan that is best positioned to support your goals.

Take control of your financial future
Pension engagement should be a priority for everyone, and by taking these steps, savers can have peace of mind that they’re on the right track.

So, this Pension Awareness Week, make a commitment to check in on your pension planning – your future self will thank you. After all, it’s never too early or too late to start taking control of your retirement savings.

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About the Author
Lily Megson is the Policy Director at My Pension Expert, one of the UK’s leading independent financial advisers specialising in retirement, rated ‘Excellent’ on Trustpilot. Founded in 2010, My Pension Expert has helped thousands of people across the UK achieve the financial future they want. My Pension Expert is a certified B Corporation and is proud to drive positive impacts positive impacts across the business, environment, and society.