When you’re younger, it’s hard to imagine what will happen when you become old. It seems like such a long time away. But when the realisation creeps up on you that time is not on your side, it can be pretty scary.
I recently asked over 10,000 of Resolver’s users what they felt about retiring, and the results were startling. Here’s what the survey revealed:
Fewer than a third of people felt they were saving enough for retirement, while half didn’t know if they were saving enough (25 per cent) or weren’t saving anything (24 per cent).
Over a third, or 35 per cent, of people were worried that they wouldn’t have enough money when they retired, while one in ten had no savings at all.
Only 25 per cent of people were able to identify how much the maximum current state pension is (£159.55 a week).
Over 40 per cent of people taking the survey said they understood little or nothing about how pensions worked.
I don’t blame them. For too long, the pensions industry has been complicated and intimidating.
What’s worse, many pension providers charge huge fees and commission payments for managing pensions. In one awful case, I found that a man’s entire pension fund had been whittled away over 20 years by the fees that were being applied to it.
I spoke to Michelle Cracknell, the chief executive at The Pensions Advisory Service to ask her why she thought people struggled with pension and retirement issues. She told me people often put decisions about their pension in the “too hard” box.
While pension providers are trying to improve their communications, the volume of paper received is very off-putting and people often don’t know how to get started. In addition, there are many different types of pensions with different rules applying, depending on when they were taken out. It can therefore be difficult for people to understand how their pension works.
So I believe we need a pensions revolution in this country. We need to stop being afraid and ask how our pensions are working in simple terms.
We need to take good financial advice and transfer our savings to providers who don’t charge ridiculous sums of money. We need to complain if we’ve been mis-sold or misled.
So why not get started today? Here are a few tips.
Find out more about your existing pensions and encourage pension providers to explain in simple terms how pension pots work. My ultra-simple guide to pensions is now on the Resolver website.
Make a complaint if you’re unhappy with the way your pension has been sold administered or mismanaged. Don’t forget to ask how much your pension is worth and how much is taken in charges.
Speak to The Pensions Advisory Service for everything from help finding a missing pension scheme to finding out how much you can save each year tax-free.
Speak to Pensionwise if you’re approaching retirement age with a defined contribution pension pot and want to know about your retirement options.
Whatever happens, don’t give up. Seize control over your retirement funds and you’ll feel so much better.