The path to a comfortable retirement invariably needs careful planning and regular pension reviews. However, recent research from People’s Partnership shows that a surprising number of UK residents are either neglecting their pension schemes or are unaware of their retirement readiness.
We look at how to understand your retirement pension and provide easily actionable steps to ensure a secure future retirement.
Table of Contents
The Stark Reality of Retirement Planning in the UK
A revealing YouGov poll, commissioned by the provider of The People’s Pension, showcases the varying levels of retirement pension engagement among UK adults:
|Frequency of Pension Review
|Percentage of Respondents
|Less than Once Every Year
|Once Every Six Months
These figures are particularly alarming in the light of government statistics that highlight that nearly 4 in 10 working adults aren’t saving sufficiently for their retirement years.
Confidence in Retirement Preparations: A Regional & Gender Perspective
The poll also highlighted disparities in confidence levels across different regions and genders.
Men, for instance, showed nearly double the confidence (32%) in their retirement preparations compared to women (18%).
Additionally, an interesting gendered behaviour emerged: 9% of men reviewed their pensions weekly or more, in stark contrast to a mere 1% of women.
Regionally, lowest confidence is in the East of England and Wales, with the highest confidence in London.
4 Steps to Secure Your Future Retirement
To mark Pension Awareness Week, People’s Partnership, which serves six million UK savers with The People’s Pension, advocates for the following measures:
- Online Account Creation: Register for an online account with your retirement pension provider.
- Regular Updates: Ensure your contact and personal details are consistently updated.
- Annual Statement Review: Regularly check your projected savings and your current contribution levels.
- Beneficiary Naming: Specify who should benefit from your retirement pension in the unfortunate event of premature death.
Closing the Gender Pension Gap
Kevin Martin, Group Director of Customer Services at People’s Partnership, encapsulated the study’s essence by stating the alarming lack of retirement preparation among UK workers. He also emphasised the gender pension gap, stressing the urgent need for government intervention to rectify this disparity.
Martin elaborated, “The findings underscore the fact that men are generally more assured about their retirement plans than women. This gap in confidence and preparation won’t bridge itself without strategic government initiatives.”
How to Save for Your Retirement Pension
In order to focus your retirement pension plans, a good input is setting the goal for your retirement age.
Whatever age you are, and whatever age you want to retire, it is never too early to saving towards it. In many ways the younger you are, the better, as not only does it give you more years to save, you are less likely to be have the same level of financial obligations as you will have in later years.
There are various types of retirement pension that you can contribute to:
State pension provides you access to your state retirement benefit when you reach the defined pension age and is based on your National Insurance record. You can still get a State Pension if you have other income like a personal pension or a workplace pension. To prevent state pensioners from falling behind, the Triple Lock mechanism ensures the state pension rises each year by the higher of 2.5%, average wage growth, or inflation.
Workplace pension offers several benefits, but there are also some potential drawbacks to consider. It’s important to evaluate both sides to make an informed decision about participating in such a scheme – take a look at our article ‘Workplace Pension: How Does it Work?‘ for more information.
Personal pension is arranged by yourself and enables you to choose when and how much you pay in with the money normally being invested in shares. The amount you get paid through retirement then being based on how much you’ve paid in, how well your investments have done and how you take your money. Read more in our article ‘How to Find A Pension Plan That Suits Your Needs‘.
Adequate pension retirement planning is crucial for a stress-free post-working life. As this research indicates, many in the UK need to take proactive steps to ensure they are set for retirement. From the glaring gender disparities to the lack of pension review habits, there’s a pressing need for increased awareness and action. After all, a secure retirement pension isn’t just about savings – it’s about peace of mind.