How much is your pension worth?
Understanding your pension is crucial to a comfortable retirement. If you are not keeping an eye on your pension and just hoping that it will be enough when you retire, you are leaving a lot to chance.
Despite this, YouGov's report Understanding Pensions and Retirement 2014 found that one in five people have no pension at all, while 12% do not know if they have one. Of those that do have a pension, nearly half are unaware of how much money is in it.
Women continue to be worse off than men, as we have written about before, with nearly a quarter (22%) of working women not having a pension, compared to 13% of working men. This may be because women are more likely to have part-time or lower paid work than men, leaving them unable to afford to contribute to a pension, and auto-enrolment has not helped people in that situation.
The worrying news is that the vast majority of people without pensions have no intention of opening one in the future. Just 21% say they plan to have a pension, and 83% of over 55s will continue without one, which could leave them financially vulnerable if they have no other savings.
This could explain why so many respondents will continue working past retirement - 32% plan to work part time, and 10% expect to remain in full-time employment. The figures do vary by age, though, with 32% of 25-32 year olds thinking they will work after retirement compared to 47% of those over 55. Interestingly, a large number of people with a high income and in the ABC1 group plan on working in retirement, which indicates that money is not on the only incentive to continue working:
The average expectation of money needed in retirement is £1,269 a month, almost three times as much as the current basic state pension, yet 45% of over 55s and over half of those aged 25-34 were unaware of the size of their pension fund.
A significant finding of the report was that people tended to be confident of achieving their retirement goals if they had a good idea of how much money they needed to live off. However, 46% of people were unsure of how much they would need to build up to have a specific monthly income from their pension. This shows how important it is to have a retirement plan and understand your pension, as that will make it much more likely that you have a comfortable retirement. We offer free pension reviews to show people how well their fund is performing, where it is invested and what fees they potentially could save.
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The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new
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