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5 simple steps to review your pension

Take these five steps to check your pension is on track for the retirement you want.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

Whether you’re someone who checks in on their investments nonstop on their phone, or you’re waiting until you’re closer to retirement before paying it more attention, there are a few simple ways to make reviewing your pension much easier.

As a rule of thumb, we think reviewing your pension once a year is a good start to make sure everything is on track. Keeping tabs on your pension is important if you want to maximise your chance of a comfortable retirement – and it might be easier than you think.

Remember, this is not personal advice and everyone’s circumstances are different. If you’re not sure if an investment is right for your circumstances, please seek advice.

How to review your pension

1. How big is my pension pot?

Start by finding out what you have. If you’ve got a recent statement for each of your pensions then just gather them together. If not, you should be able to find out the value by either going online or calling your pension company.

If you’re not sure where to find old pensions, don’t worry – you can use the government’s Pension Tracing Service to track them down.

2. How much am I contributing?

When looking at the size of your pensions, make a note of how much you’re paying in and how much your employer pays. You might find you’re contributing more than you can afford, or less than you thought, and decide to adjust accordingly.

Before looking at reducing your pension contributions, check with your employer to see what this could mean for any company contributions.

3. Am I on track for the retirement I want?

Run your details through our pension calculator to see how well you’re doing. Don’t worry too much about when you’ll retire, you can start with your state pension age for now – for most of us this is likely to be around 67 or 68. This should give you an idea of what your pension could be worth at retirement and what you should be aiming for.

In terms of the income you should be aiming for in your retirement, a rule of thumb is to have between half to two thirds of your salary when you leave work, but you can re-evaluate this goal once you get closer to retirement and your plans are clearer.

Check if you're on track

4. Check your investments

Most workplace pensions offer a default fund, which is a type of investment chosen for people who don’t want to make an active investment choice.

The default fund will aim to grow your money through a range of investments during earlier years, usually weighted towards the stock market. Some pension providers will automatically move your money into funds with lower-risk assets such as government bonds and cash as your retirement grows nearer.

More about funds

Even if you’re happy with the default option, you should still keep tabs on its performance. You can ask your pension company for a fund factsheet, where you should be able to identify the performance of your investments.

Don't look at the funds in isolation or focus solely on whether they’ve gone up or down in value – even the best fund managers lose money sometimes.. It’s more useful to compare your funds against their benchmark and other funds within the sector– is your fund outperforming its peers? Just keeping pace with them? Or lagging behind? Just remember past performance is not a guide to the future.

You might also decide that you would like to increase your risk if you’re still quite far off retirement. Generally, higher-risk investing means accepting that any falls in value may be greater but there are higher potential returns, so putting aside at least a portion of your investments into higher-risk investments could see your money going further, if you are willing to accept the greater risk.

Learn about investing and risk

5. Are your investments aligned with your values?

This isn’t necessarily something you need to do every year, but if you haven’t checked in with your pension for a while it might be something to consider.

You might find that you could invest some of your pension in something you’re passionate about – such as hobbies, commodities, your favourite brands, or a sustainable fund.

It’s not a necessity and everyone is different, but you could find that doing some good with your pension could be an added bonus alongside getting to your retirement goals.

Remember all investments, including default funds, can go down as well as up in value so you could get back less than you invest. If you’re not sure if an investment is right for you, you can always ask us for advice.

Read our Guide to responsible investment

Boost your pension

Now that you’ve finished reviewing your pension, is there anything you could do to improve it? If you think you could do more, it’s never too early or too late to take action.

If you’re lucky enough to have any spare cash or are thinking about giving up your flat white on the way to work in the morning, you could consider adding the savings to your pension. Things like this might seem insignificant now, but as long as you also have some cash set aside for emergencies, saving small regular amounts into your pension could make all the difference to your retirement income. If you have one, ask your employer if you’re able to increase your contributions. They might even match your new amount – so make sure you speak to them.

Remember you can’t usually access the money in your pension until you’re 55 (57 from 2028).

More about adding money to a pension

Want to make reviewing even easier?

The average person has 11 jobs in their life. That could mean 11 different pensions. Once you’ve checked how your old pensions are doing, you might want to consider transferring them so everything is in one place.

Getting all your pensions under one roof by transferring can be an easy way to manage your pension more effectively, review it regularly and stick to your targets.

Plus if you transfer a pension to HL before 30 April, you could receive cashback as a thank you. Terms apply.

Before transferring make sure you check you won’t lose any valuable benefits or have to pay high exit fees. Pensions are usually transferred as cash so you will miss any market rises or falls for a period.

How to transfer

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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