Haven’t looked at your workplace pension in years? Here are seven things to check
You probably check your bank account regularly. You might shop around when your car insurance renews or your mortgage deal ends. But when did you last take a proper look at your workplace pension?
For many people, the answer is “not for years”.
It is easy to see why. Contributions come out of your salary automatically, an annual statement arrives, and retirement feels like something to think about later. Change jobs a few times and you can end up with several pensions, each quietly running in the background.
Your pension deserves some attention. You do not need to become an investment expert to start. These seven checks will help you understand what you have and whether it still fits your plans.
This guide focuses on defined contribution pensions, where you build up an invested pot. Final salary and career average pensions work differently.
1. Do you know where all your pensions are?
Start with a list of your current and previous employers, then match each one to any pension paperwork you have.
For each pension, record the provider, policy number, latest value and whether contributions are still being paid. Check that your address and contact details are correct.
If you cannot find an old pension, contact your former employer or use the government’s Pension Tracing Service to find contact details for the scheme. The service helps you find who to contact; it does not tell you the value of your pension.
Getting organised gives you a starting point for the other checks.
2. Do you know what your money is invested in?
Knowing the provider’s name is useful, but it does not tell you how your pension money is invested.
Think of a defined contribution pension as a container. Inside it are investments, which might include shares, bonds, property or cash.
Find the names of your funds on your statement or online account. Then ask your provider for information explaining what they hold.
Look beyond the latest return. How much can the value fluctuate? Is the money spread across different investments? Does the level of risk feel appropriate for your circumstances?
The fund that topped a performance table last year will not necessarily be the right choice for your retirement.
3. Does the default fund still suit you?
If you never chose investments, your money will usually have gone into the scheme’s default arrangement.
Default funds can be a useful option. They are designed for a broad group of members and offer a convenient way to invest.
However, your own retirement plans may differ from the assumptions behind the fund.
Check what it is designed to do as retirement approaches. Does it prepare you for taking cash, buying a guaranteed income through an annuity, or keeping money invested and drawing an income?
You may be happy with the answer. If you are unsure, ask for an explanation before changing anything.
4. Is your recorded retirement age correct?
Your pension provider may have a retirement date on file that you selected years ago, or one set automatically.
Some investment strategies gradually change the mix of investments as that date approaches. This is often called “lifestyling”.
That makes the date worth checking.
For example, your pension might be working towards retirement at 60 while you now expect to work until 67. Equally, you might want to retire earlier than the date recorded.
Ask what changes happen, when they begin and what retirement option the strategy targets. Reducing investment risk can be appropriate, but the approach should be considered alongside how and when you expect to use the money.
5. Do you understand the charges?
Ask your provider for a clear explanation of the total costs, including pension administration, investment charges and any other applicable fees.
Percentage charges can seem small. A 0.5% annual charge on a £100,000 pension is approximately £500, assuming the value remains unchanged.
Costs matter because they reduce the money available for growth. But compare what you receive for those costs too, including investment options, service and retirement flexibility.
If you are considering a different arrangement, compare the full cost, including any advice charges. A transfer does not automatically save money or improve your outcome.
6. Are your contributions on track for the retirement you want?
Having a pension and having enough for your retirement are different questions.
Start with the life you would like: when you want to stop or reduce work, your likely household spending, and whether you expect to have a mortgage.
Then consider how your pensions, State Pension and other savings could support it.
Check your employer’s contribution rules. Some employers pay more if you increase your own contribution, up to a limit. Before committing more, consider your everyday budget and emergency savings.
Retirement projections can help you explore the possibilities, but they depend on assumptions about investment returns, inflation and how long the money needs to last.
7. Are your beneficiary nominations up to date?
Ask your provider who you have nominated to receive any pension death benefits.
This is often recorded on an “expression of wish” or beneficiary nomination form. Review it after marriage, divorce, a new relationship, the birth of a child or a death in the family.
For many schemes, the nomination guides the provider or trustees rather than binding them.
The benefits available depend on the scheme’s rules, so check those too.
Do not assume that updating your will also updates your pension nominations.
Should you bring your pensions together?
Once you have gathered the details, combining pensions might make them easier to manage. But check carefully before transferring.
An existing pension may have valuable guarantees, protected benefits or exit charges. Moving an active workplace pension could also affect employer contributions. Defined benefit pensions require particular care.
Sometimes the best outcome is to keep an existing pension and review its investments or contributions.
Take the first step
Set aside half an hour this week to find your latest statements and log into your pension accounts.
You do not need to solve everything at once. Start by understanding what you own, then identify the questions you need answered.
If you would like to discuss your existing pensions and retirement plans, get in touch through Moneyrocket’s Personalised Advice page. I can explain how to access regulated advice and what the process involves.
This article provides general information and is not a personal recommendation. Investments can fall as well as rise, and you may get back less than you invest. Past performance is not a reliable guide to future returns. Obtain regulated financial advice before making decisions where you are unsure about suitability or the benefits you could lose.
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