/ Money

Update: do you know if your retirement plans are on track?

Pension saving

Our research has found that nearly half of those over 50 aren’t sure of the value of their pension. But knowing these details is vital for making informed retirement decisions. So do you know what’s in your pension pot?

Gone are the days when people worked for one company all their life. In fact, the Government estimated in 2011 that on average people will work for 11 employers during their lifetime.

With the introduction of auto-enrolment for workplace pensions that means more and more of us will retire with multiple pension pots. For what it’s worth, I’ve got three different pensions so far.

Keeping a track of your pension can be difficult, but this is pretty critical information when you’re planning how to turn those savings into a retirement income. So how can things be improved for savers?

Tracking your pension using the pensions dashboard

Imagine if you could go online, securely, and – maybe using your national insurance number – see all the information about your pension pots and savings, alongside your state pension forecast.

Well it’s not impossible; these types of pension dashboards already exist in Sweden, Denmark and the Netherlands.

When we asked people approaching retirement age how much they knew about what they’d saved, four in 10 found said they it difficult to keep track of their retirement funds. And a fifth said they wouldn’t know how to find out this information.

But that’s no surprise really when you think that currently you need to keep the paperwork from all your different pension providers, update them all when you move house, or try to remember if you had a pension with that firm you worked for 20 years ago…

Keep it simple for savers

A pensions dashboard could house all this information in one easily accessible place. It could give people a complete picture of their retirement fund and, in turn, help them make informed choices. It might also help engage people with their pensions while they’re still working.

We’re now calling on the Government to commit to the testing and introduction of a pensions and savings dashboard without delay. The regulator has previously said that it would work towards this in the longer term, and the pensions industry is supportive too.

Update: 12 September 2016

Earlier this year, the Treasury backed our call for a Pensions Dashboard. Within the Chancellor’s Budget, plans were announced for the free-to-use online dashboard to be delivered by the pensions industry by 2019.

The Treasury has now announced that 11 pension providers have joined together, in a scheme managed by the Association of British Insurers, to build a prototype of the dashboard.

The long-awaited Pensions Dashboard will see a beta version ready by March 2017, with the dashboard due to be available to the public by 2019.

Do you know how much is in your retirement savings? Do you think a dashboard like this could help you with tracking your pension?

D Fisher says:
10 March 2016

This is an excellent idea. I retired towards the end of last year and had spent at least the prior two years attempting to track down the value of my pension entitlements in order to establish that my planned retirement date would be feasible. This proved to be very difficult. Pensions administrators had been changed without any notification to me, and trying to get a clear statement of my entitlement at a point in time proved to be difficult. The difficulties of getting an aggregated picture were much greater than I had anticipated.

The state pension situation was also very unclear, and this in particular was unacceptable. For a long time we were told that it would be a flat rate of about £7200 per year from 2016 and then suddenly we are told that this is not the case for many people and ther4e will now be a taper depending on the level of NI contributions.

The production of a dashboard would certainly help people realise that they need to plan for retirement much earlier. I have tried to explain to my children why they need to have some plans in place, but unless they are presented with actual personalised information they find it difficult to understand their current position. Keep pushing this!

It’s certainly very confusing so assessing my pension looms large as a very big job to get my head around everything. As I am busy, that just means that a pensions review just gets put off and in the meantime the retirement date creeps closer and closer. A dashboard is a superb idea to help. It would make things easier, so help with not putting the matter off. It would include government pension levels where I too am unclear about the rules. It would also make planning easier since it would show when best to retire and the impact of things like delaying taking pension. A great idea and since some other countries are already doing it, the government wouldn’t be starting from scratch with this. Bring it on HMG … quickly please!

David Ibbott says:
11 March 2016

I have recently paused my state pension (“de-retired”). I only discovered I could do this because Which? Money highlighted it in an article.
My IFA and SIPP provider keeps me informed as to how my pension pot is faring.
A pension dashboard would have been very useful before retirement and would certainly benefit those still working in preparation for retirement.

This is an excellent idea.

Gail says:
11 March 2016

Brilliant idea! It is a mine field out there, and even with projections of worth, you are still in the dark as to whether it going to be enough.

As a civil servant with a generous final salary scheme I knew exactly how much I would get when I took early retirement.
What was very uncertain is when I bought an annuity with my AVC fund. I had to do research to find out who would give me the best deal ( turned out to be Canada Life). But when I finally chose, I was subject to variations in the stock market, and hidden charges. The total fund dropped about £3500 between completing the paper work and getting the quote. Also, annuity rates dropped markedly over the years which was beyond my control. These are my warnings about Annuities for those people currently making decisions.
Overall though, I did very well and have no money problems in retirement ( apart from having too much money to manipulate !!)

I had to take out two annuities before I could access my works pensions.

It would certainly have been helpful when I was preparing to retire, I had 3 frozen pensions and each time I made inquiries, the totals were different as the stock market fluctuated. In the end, it did not bring the promised benefits as the Bank of England interest rate became virtually zero. And they say that pensioners should lose their perks as they have not had to make sacrifices as the rest of the population has! (excluding the higher earners, as they have been well looked after).

Back in 1989 I was offered the choice of a final salary pension. Since then because of the myth that people are living longer Sainsburys decide that my pension would be suspended. We were then given the choice of a “Pensions Savings plan” which paid out less money but a donated “Compensation” for 6 months adding to my new pension plan. MY point is the original plan I was offered obviously mislead me so I should get additional compensation in cash as it’s similar to the PPI misselling ?

Helen Angus says:
14 March 2016

A great idea – I would also hope that suggested top up payments could be flagged up so you could boost your pension if necessary.

Excellent suggestion. I hope it can happen, and for once, be a successful on time and on budget Government IT project.

Yes it would be great to get that estimate. For a SIPP though anything can change of course – such as the recent market falls, which will impact adversely on what you thought a few months before.
Rethe State pension, the big con of £155 per week for all ! – this needs setting out clearly. It is not necessarily the case that more NI equals more state pension though. All sorts of reasons mean that is not the case including being self employed !!

great idea fully support and myself and my husband would use this facility.

Ranjana Patel says:
16 March 2016

It would also be very helpful if we knew how much the average charges would be for financial advice.
My husband will be paying £970 approx for pension advice and for his adviser to shop around for the best annuities, as it is a minefield!!

Although I am now retired and have vested all of my pension funds I think it would be of great benefit to those still contributing to pension schemes to have access to a pension funds dashboard . Although I changed employment only twice of my own volition in the forty years prior to retirement, I contribute, at different times during that period, to eleven different pension funds. This was due to the vagaries of the regulations governing earliest of the funds, my contribution to Free Standing AVCs and employers changing their chosen pension provider.
As a result, the existence of several of the earlier funds was initially overlooked when converting the funds to annuities even though I had used the services of a Financial Adviser. Thankfully these funds eventually came to light but it illustrates the difficulties that can be encountered in keeping track of a number of pensions.

Although it is good the pensions dashboard will be brought in 2019, I am afraid that is too late for those of us retiring in the next 3 years. I need one now!!

My son was caught in the “Pay more for longer, to get less out” bracket. Low paid, long serving civil servant. He simply quit working due to depression.

I feel the rules and regulations regarding pensions are too complicated. It has been over a year now (09/03/2015) since I contacted a financial adviser, to gather all my pensions into one place, to save having to deal with several providers and all the paperwork that would involve. Over a year later (19/03/2016) I am still in limbo, while a small percentage of my pension is now where I would like it, the majority has not yet been transferred to my preferred account. I have now retired (07/02/2016) but I am unable to draw any monies from my pensions, thankfully I have a bit of savings, but I did not plan using them for everyday living. On top of this, because it has taken so long since my first company pension calculation I have had to pay out (£360) to have another re-calculation done (only guaranteed for I think it was 6 months) with only one calculation per year done at no cost.

I wish Which could lodge a complaint with the Treasury over the multitude of changes it has made to pensions both private and public. Some changes based on demographics are accepted but when a young person is persuaded to commit to an occupational scheme, and where also he is also encouraged to go further than that and make additional contributions again encouraged to ensure he places no future burden on society, He is going to be most upset when the rules change and seek to tax amounts he has put aside in good faith at a punitive 55%, not because he has saved too much, but the’ lifetime limit’ has been brought down so low and the means of calculating it is so complicated only those working daily with these matters know how to even go about it. The treasury broke the contract with public sector pension both by putting up the cost, which had the merit of being open, and was agreed. It then used the tax system to remove the benefits in such a complex way that those, like me, coming to the end of their career find themselves they are over a limit they never knew existed, will be charged tax at 55% on the excess they never knew they had created, and until they get an expert to tell them they will not know because the calculation methods invented to calculate , utterly incomprehensible. The net effect has been for those like me in their 50s to have no idea whether by continuing to work they are exceeding this limit and will be fined, You could compare it with driving a car, and as you drive the speed limit , keeps falling, but someone has disconnected the speedometrer, You have no way of telling if you are going to be fined until you get to your destination . That is treating people with no respect

Anna Smith says:
22 March 2016

It is such a worry to think about a pension and how to get it right. I certainly believe that a dashboard where we can see at a glance all the information we need is the answer. Please, please push for one. Thank you.

Why do investors have to pay fund providers or Independent Financial Advisors an annual % fee on funds already invested – Surely the fee should be only up front at time of investment?
% Fees linked to fund holdings and not performance guarantees an income in good and bad years to the advisor/provider only.
Is there an escape from this unfair lock in and better information to provide performance figures after all deductions?

You are, in effect, employing your IFA if they trade and manage your portfolio on your behalf. So a good one will be changing your holdings (but not churning) to meet your objectives, reinvesting the income, keep rebalancing your portfolio for riskier investments, bonds, income generators, blue chip stocks as markets change, provide you with current valuations and cash statements – doing work that you would otherwise spend time doing and providing expertise you don’t have. They could charge through trading but that would encourage unnecessary buying and selling, so I’d rather pay a known fee – providing they do a decent job for me.

If you don’t want to pay for a service then you can buy and sell yourself, or invest directly in unit trusts for example. If your fund manager does nothing, then either do it yourself or if you need assistance, find a decent IFA.