Why You Should Have Your Pension Reviewed

author image-crispin
By Crispin Bateman
Updated on Monday 3 June 2019

Older couple having a selfie at the top of a mountain

Pensions – even the very word makes you feel and sound older! When you are younger, it’s very easy to think that pensions are something you don’t need to worry about, but the earlier you start to understand about your personal pension, the better off you will find yourself!

What is a pension?

If you’ve ever dealt with them before, there seems to be a lot of mystery surrounding the idea of a pension, but really, a pension is nothing more than a clever savings account that you can draw money from once you retire and stop earning money.

In the UK, we also have a state pension which is paid for through your National Insurance contributions. It really should be thought of as a fall-back plan as for most of us, the small amount of the state pension is enough to stop us starving in old age, but it’s not going to give you a luxurious lifestyle that you can enjoy.

By law, under the Pensions Act 2008, every employer in the UK has to also pay into a pension for their employees (which you will also contribute into).

Why it’s important to review your pension

You may feel it’s enough to simply let your pension tick away in the background, growing in its own little way without your involvement.

But, you may find by doing that, you could be throwing away so much money!

Many pensions are tied to investments, which means that part of your private pension savings pot may grow over time (though it could also drop if the investments go bad). Different pension companies offer different investment opportunities and wherever your pension is held, it could have a strong impact on its value when it comes to your retirement.

Knowing exactly what your pension is doing is vital to a happy retirement.

Other reasons why you should review your pension

Planning your retirement

Do you know how much you have in your pension? Most people don’t. A no-obligation pension review is going to immediately show you the size of your pension, the amount it is expected to grow by and it will give you the details you are after to plan your retirement.

You may be pleasantly surprised, or you may be saddened and shocked. Either way, the sooner you get it checked, the sooner you can act – if you even need to.

Ensuring it is used in the way you want

Laws regarding who pensions go to in the case of death mean you could find that without intervention and understanding how your pension is performing, it gets paid to someone you don’t expect it to. Quite often after a pension review, people discover their pension would have gone to an ex-spouse rather than their current family.

A regular review will make sure it’s set up the way you really want.

Limiting fees

Pension companies have their own money to make – and they charge fees for maintaining your pension. Is your employee pension being governed by a more expensive service? Could you increase your pension choices and lower costs by switching to another? Are your pension contributions doing as much as they could be?

Pension advice from Compare UK Quotes

Whether you are going to end up relying just on a government pension, or unknowingly have a frozen pension, a pension review is going to inform you of every fine detail. Should you have your pension reviewed? Absolutely – and regularly. It’s worth checking on every couple of years, especially if you have changed jobs or family circumstances.

For more great personal finance advice, check out the library of articles here on Compare UK Quotes!

money management money saving tips save money pension retirement

Latest News