Women and pensions: annual pension statement

Can you honestly say you’ve ever felt a rush of excitement at receiving your annual pension statement?

I haven’t, which occurs to me, is rather a shame. After all, it’s information about the single largest savings effort I make during the year and seeing how much I’ve managed to squirrel away into my DC pension pot for my future self should be cause for celebration, right?

Helping people to understand their long-term savings plans and options at retirement is not just a ‘nice to have’, it’s essential.

Lost in translation

Yes.  It should.  But if you’re anything like me, you look at that envelope from your pension provider with a sigh, knowing full well that the technical complexity, jargon and long-winded detail mean spending a couple of hours trying to decipher what it actually means.

It’s irritating. Surely communicating this type of information shouldn’t be this difficult? Especially as helping people to understand their long-term savings plans and options at retirement is not just a ‘nice to have’, it’s essential.

Access all areas

You might be lucky enough to have an employer sponsored education platform like 4me to help you keep track of your pension, or you could be making the most of the online account that your pension provider has made available. But, if you’re relying on your annual statement as the only communication about the status of your pension, then read on for some help on how to make to most of it:

1) Take a look at how much you have in your pension account.  There will be a starting figure at the beginning of the period and the final amount for that year – give yourself a pat on the back for contributing towards the happiness of your future self!

2) It might surprise you how little of the total contribution you actually make!  Take a closer look at what you’ve paid in over the year alongside how much your employer and the Government (in the form of tax relief) contribute.

3) Review your ‘selected retirement age’ and make sure it’s still relevant.  People’s circumstances change for all sorts of reasons, so it’s worth considering whether you are still on track to achieve the retirement you envisage at the age you’ve chosen.

4) Take a look at the estimate of how much you might get when you come to start taking your pension.  This figure is a good benchmark so you can start thinking about how you might take that money and importantly, it will help with working out your budget.  If you can already see that the amount you have isn’t going to provide the lifestyle you’re imagining you should consider trying to pay in a bit more now.

5) There are charges, we can’t avoid them, but you should be able to see what you are paying for in your statement.

6) Review the fund your money is invested in . . . or don’t!  You might feel really comfortable with choosing how your pension fund is invested, but you may also want to leave it in the default if that suits you.