How to review your pension
Reviewing your pension may not be the most exciting way to spend an afternoon, but failure to keep an eye on your savings now could cost you in the future. Moneywise TV explains what you need to do.
When was the last time you reviewed your pension? If the answer is 'never' you aren't alone.
But failure to monitor your retirement savings could cost you. If you're investing in poor-performing funds, your pension could be shrinking.
Regular reviews provide the opportunity to see how your investments are performing and allow you to make changes to keep your retirement plans on course
If you're in a final salary scheme, your retirement income will be based on the number of years worked, but if like most people you're in a defined contribution scheme with work, the size of your pension will depend on the stock market and the funds you're invested in.
You can't control the markets but you can decide where to invest for best returns. For work schemes, schedule an appointment with your firm's financial adviser.
They'll tell you what your pension is worth, where it's invested, your likely retirement income and they should explain how you can improve your position. You may need to increase contributions - but big improvements could be made simply by switching funds.
If you have a personal pension, start by contacting your provider - you need a valuation, details of where your money is invested and how those funds have performed against the relevant benchmark. Also check for any charges.
For ease, many people plump for the pension's default fund but this is unlikely to be the best option. Instead aim to build a selection of funds that reflect your age and attitude to risk.
All fund managers will have off years but if your funds are consistently lagging, consider alternatives.
Ask your provider what other funds they offer and look to switch. Getting the right balance can be difficult, so consider speaking to an IFA or check out the Moneywise pension awards, for our recommendations.
Reviewing your pension is a daunting task. But make a commitment to look at it once a year and you'll be much more confident of a comfortable future.