How new technology could improve your pension savings
Whether it’s spending or saving, keeping track of your money is the only way to have an accurate idea of what your financial situation is. If you had a fixed budget for the month, were trying to save for a holiday or clear a credit card, you would check your accounts to monitor progress. Yet when it comes to pension savings, people are less inclined to observe the performance – leaving them vulnerable to poor performance and excessive fees.
A recent survey has discovered that “a quarter of working age people with a pension have never checked their savings” and, worryingly, 59% of workers and under-65s looking for work do not know how much money they have saved for their retirement, including 44% of those aged 55-65. The danger with this is that not knowing how much you have means you do not know if you need to make adjustments to maximise your pension savings.
The survey also found that just 30% of women know how much they have saved for retirement, which could exacerbate the pensions crisis that women face.
Embracing new technology
While 40% of respondents do not even check their pension savings every six months, more than three-quarters look at their bank account at least once a week. This suggests that people would be more inclined to review their retirement savings if the process was easier, as mobile banking and websites that consolidate all bank accounts and credit cards into one place make it very quick and simple to check general finances.
Such an idea seems popular: 93% of respondents think people should know how much they have saved, and 77% of those would welcome a dashboard. Theoretically, this could include all of a person’s private, workplace and state pension funds.
This could prove especially useful for the smartphone generation – being able to check pension savings through an app would probably encourage people to do so. There could be a number of changes in the future, including comparison websites, mobile apps and a dashboard.
A pensions passport pilot has been launched by LV, in conjunction with the Treasury, and will be sent to people instead of wake-up packs. This pilot will help the FCA’s development of a dashboard, so it could become a reality in the near future.
Planning for retirement
Retirement can now last for decades, so it is arguably more important to save now than it has ever been before. Unfortunately it isn’t adequate to save money and hope for the best; regular pension reviews can help ensure you remain on track to meeting your later life income goals, by monitoring your fund’s growth and fees. Reviews can be particularly effective if you have multiple pots and would benefit from consolidation
Would you like to see easier ways to monitor your savings? Let us know with a comment below.
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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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