How to get the best out of your pension

If you have spent years contributing to your pension fund in the hope of a comfortable retirement, you will want to get the best income when you decide to stop working. In order to do so, you can't leave it to chance that your fund will be in good shape when you need it; instead, if you keep a close eye on your fund you will be able to see how it is performing each year and make any necessary changes. So how to get the best out of your pension?

Get the best out of your pension with a review

If you decide to check on your fund's performance, a pension review is a convenient way to do so. This will show you:

  • If your fund is performing better or worse than can be reasonably expected
  • Charges and fees you are paying
  • Where your fund is invested
  • If your pension is on track to provide the retirement income you desire

Pension reviews are important because you otherwise don't know if you are on track for a good retirement income or not. Many older funds are performing poorly, which can have a significant impact on your eventual fund size, so you could find making some changes improves your performance.

Some companies may charge for a pension review. When looking for a company to conduct a review, ensure that they are on the FCA register to avoid falling victim to a pension scam.

Making your pension work for you

Just as you keep an eye on your bank account to know how much money you have in there, you should monitor your pension to keep it on track. Having saved diligently for so many years, it can be devastating to reach retirement age only to find that high charges have eroded much of the investment growth, leaving you with far less than you had anticipated.

Although performance fluctuations are normal, reviews can help to keep your fund on track and performing realistically. It can also protect your fund from high fees. All of this works in your favour to boost your likelihood of having a larger fund when you need it most.

None of this is to suggest that you should obsess over your pension. An annual review is sufficient to keep you on top of things, and the earlier you correct any negative factors - such as paying unnecessarily large fees - the better it will be for your fund.

The changes to pensions provide far greater flexibility with how they can be used, giving you far more options in retirement.

Have you taken steps to get the best out of your pension? Let us know with a comment below.

Call 0800 304 7288 for a friendly chat about your pension

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:

We are really looking forward to reading your comments. Before you start writing, please just remember that everything you write will be displayed publically – including your name. Not sure what sort of thing you can write, and what sort of things you should avoid? Please have a quick read of our social rules for guidance.

Back to top