The State Pension is not a lot of money. At just £168.60 per week, it’s barely enough to survive on and to make matters worse, many pensioners don’t even receive that amount. According to recent research from Canada Life, nearly 40% of pensioners are pocketing less than £150 per week.
If the thought of trying to survive on that amount of money in retirement worries you, it’s a good idea to take action, sooner rather than later. Here are three things you can do immediately to boost your chances of enjoying a comfortable retirement.
Track down old workplace pensions One of the first things you should do if you’re serious about getting your retirement savings sorted is to work out if you have any old workplace pensions that you have lost track of.
The average person today has over 10 jobs in their career, so there’s a chance you may have had pensions with past employers and forgotten about them. Indeed, according to research from the Association of British Insurers (ABI) and the Pensions Policy Institute (PPI) last year, there are around 1.6m ‘lost’ pensions in the UK, worth a staggering £19.4bn, or around £13,000 per pot.
If you do have any workplace pensions that you have lost track of, it’s definitely worth tracking them down. You could have substantial pension savings you don’t even know about.
Consolidate your pensions The next smart move is to bring together any old pensions accounts and consolidate them into one account. By having all your pensions in one place, you’ll have far more control over your money, and managing your retirement pot should be easier as you’ll have a much clearer picture of your overall pension savings.
An easy way to do this is to open a Self-Invested Personal Pension (SIPP) with a financial services provider such as Hargreaves Lansdown (LON:HRGV) or AJ Bell and transfer all your old pension accounts into your new account. This is a simple process that is usually just a matter of filling out a few forms.
I’ll point out here that in some cases, a pension consolidation may not be the best move. For example, if you are a member of a defined benefit pension scheme you may be better off staying in it. If in doubt, speak to a financial adviser or pensions expert.
Get saving and investing Finally, putting a regular savings and investing plan in place is also a very smart idea. Put a savings plan in place early enough, and invest your money in the right assets, and you could potentially build up a portfolio which generates a nice little additional retirement income stream to supplement your State Pension income.
And don’t forget about ‘tax relief’ – if you save into a SIPP account, the government will top up your contributions.
Edward Sheldon owns shares in Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2019