When you were younger, you likely didn’t think that much about your pension. The contributions are taken from your salary, so you never see those funds. You typically can’t access your savings for decades to come either, so it’s easy to forget about your pension.

If you rarely, or never, check how much is in your pension or whether your investments are performing well, you’re not alone. According to the Independent, UK adults are around twice as likely to track their daily steps than their pensions.

Regularly reviewing your pension could tell you if you’re on track to meet your savings goals, or whether you might need to adjust your contributions. You can also explore different investment funds that might be better suited to your goals.

Monitoring your pensions in this way might be especially important during transitions in life because your goals or financial circumstances may change.

Read on to learn three life milestones when you might need to pay extra attention to your pensions.

1. Starting a new job

Starting a new job could affect your retirement savings in several ways, and it’s important that you review your pensions to ensure you remain on track to meet your goals.

When you move jobs, you may stop contributing to your current pension scheme and start paying into one that your new employer chooses. The fees you pay on the new pension may differ from your previous scheme, and the employer contributions might vary too. Additionally, you might have access to different fund options from your new provider.

You may benefit from reviewing these details so you’re aware of how much is going into your pension each month, what the management costs are, and what level of growth you could achieve. Using this information, you can see whether you’re still on track to meet your retirement savings goals or if you need to adjust your contributions and consider different investment options.

Further to this, you may have moved to a new job with a higher salary, meaning you could be in a position to contribute more to your pensions. Increasing your contributions as your earnings rise could make it easier to achieve your dream lifestyle in retirement.

Finally, it’s important to consider what happens to your pension from your old job. You might decide to move these savings into your new pension scheme or leave them where they are. If you don’t plan to consolidate your old pensions into the new scheme, you may want to gather all the relevant paperwork and keep it safe, so you don’t lose track of any of your savings.

2. Having a child

Having a child is a significant lifestyle change that often affects your finances. When you start a family, your general outgoings will likely increase, and you might move into a larger home. As a result, you may not be able to afford to contribute as much to your pensions as you previously could. You might also want to use a portion of your disposable income to contribute to savings for your child.

As such, you may want to review your pension contributions and consider what you can realistically afford.

You might also take a career break to care for your child, and this could significantly affect the value of your retirement pot in later life. Figures from Royal London show that if you earned £70,000 a year with an 8% matched contribution, you could increase your take-home pay by £3,360 if you stopped paying into your pension for one year.

However, you would miss out on £12,192 going into your pension. This includes your own contributions as well as employer contributions and tax relief. After 20 years, this could mean that your pension pot is £31,508 smaller than it would’ve been if you didn’t take the one-year break. This figure is based on 5% annual investment growth net of charges.

You may want to consider this and explore ways to mitigate the effects of a career break. You could do this by:

• Increasing your contributions before or after a career break
• Maintaining your contributions during the career break, if possible
• Asking your partner to contribute to your pension on your behalf.

If you plan ahead in this way, a career break might be less likely to affect the overall value of your pension in later life.

3. Going through a divorce

Navigating a divorce is incredibly emotionally challenging, and it can have a significant effect on your financial plan too.

Your pensions are often your largest asset aside from the family home, and so it’s important that you include your pensions in the settlement. Unfortunately, PensionsAge reports that 75% of divorced women and 56% of divorced men failed to discuss pensions during a divorce.

If you don’t consider sharing pensions, you could find it far more difficult to achieve your dream retirement after the divorce. This is especially true if your ex-partner had a larger pension pot than you and you were reliant on their savings to fund your desired lifestyle, to some extent.

Fortunately, when you split pensions fairly, you may be more likely to remain on track to meet your retirement savings goals.

Additionally, your aims in life may change following a divorce. After all, while you were married or in a civil partnership, you likely planned your retirement as a couple, based on your shared wants and needs.

Now that you’re entering this new phase of life, you may have different priorities. As such, it could be useful to review your retirement targets to ensure that your financial plan is still suitable for your unique goals.

Get in touch

We can help you regularly review your pensions to ensure you can achieve your dream lifestyle in retirement.

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330. As an award-winning financial advice company with advisers included in the 2024 VouchedFor Top Rated guide, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.