Is your pension still on track?

MOST of us are worrying about how to balance our domestic budgets at the moment.

FINANCIAL woes continue to affect us all. With household bills on the rise, exacerbated by lingering debt and the threat of unemployment in many sectors, it’s easy to see why we’re trudging our way from one day to the next.

In the midst of these pressures, it’s easy to lose sight of something very important; our pension. A new survey from Prudential has revealed that 35% of British adults have stopped making payments into their pension, with 33% citing being out of work as their reason for doing so.

Although this may seem like a means of solving our current financial difficulties, this could be detrimental in the long term. Even those who do continue to contribute to a pension scheme may not be on target with their savings because they are simply unaware of how much they should regularly be putting aside.

It is important to find out what you are worth now, so that you can adequately prepare for the future. To take the first step, visit where you can download a BR19 form and apply for a state pension forecast. This reveals your likely state pension according to the contributions you have made up to now. Once you know how much you are likely to receive, you can adjust your financial planning accordingly.

Thanks to a better standard of living and excellent levels of healthcare, men and women in the UK can expect to live until their late 80s and early 90s. By 2034, 23% of the population is projected to be aged 65 and over.

As an ageing population, we must also consider the possibility that a state pension may not exist by the time we eventually retire. Even if it’s still in place, it’s clear that the state pension alone will not support a comfortable lifestyle in retirement.

We must all take a proactive and disciplined approach to planning for our retirement by regularly putting money away for our pension. Something is better than nothing, and this is where an Independent Financial Adviser (IFA) can help. By considering how much you are prepared to pay each month, and establishing what you would ideally like to live off when you retire, an IFA can advise you on the best options.

An increasing number of people are abandoning their pension pots in favour of downsizing their properties and living off the excess money raised from this. But with property prices taking a dip, this is an unreliable option.

It is often assumed that pension schemes are too expensive, but the truth is that there are some low-charge schemes that are well worth looking into. There are a growing number of personal pension plans that don't carry high up-front charges, but it is important to carefully check the documentation you are sent for the figures that show what you might get back after various time periods.

A good pension will be one that is flexible and takes account of the fact that your life might change. It should allow you to retire at any time after 55 without penalty, stop paying contributions at any time without penalty, and vary contributions at any time. If you’re unsure where to start, an IFA will help you find a plan that combines two important factors – low charges with reasonable performance.

If you already have a private pension, review it regularly to ensure that it still meets your requirements. Consider whether or not you need to diversify your portfolio. If you are nearing retirement, you should not invest in a high-risk fund, but if you have many working years ahead of you, then you will be able to look at higher-risk choices. It’s also worth remembering that the Government gives you generous tax relief for investing in your pension.

If, over the years, you’ve moved jobs and have paid into several different pensions, an IFA can advise on how you can collate these into one pension pot.

The earlier you start to save, the better your standard of living will be when you reach retirement. Make an appointment with an IFA who will help you find the best pension scheme for you, so that you can look forward to a financially stable retirement in years to come.

:: Alok Dhanda runs Dhanda Financial, 52 Dean Street, Newcastle, NE1 1PG, telephone 0191 255 8960, email  or visit


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