100s of titles, one news app for just $10 a month.
Dive Deeper:
Get all your news in one place
Latest Lifestyle news:
Cluttercore: Gen Z's revolt against millennial minimalism is grounded in Victorian excess
Have you heard maximalism is in and minimalism is out? Rooms bursting at the seams with clashing florals, colourful furniture…
Read news from The Economist, FT, Bloomberg and more, with one subscription
Learn More
#JusticeForSheila highlights the precarious lives of queer people in Kenya
Kenya is one of 32 countries in Africa that criminalise homosexuality. People who identify as lesbian, gay, bisexual, transgender and…
Rwanda: LGBT rights are protected on paper, but discrimination and homophobia persist
“From today, I no longer want to be called your mother, if you don’t want to change you can leave…
Nike and Jacquemus are making sportswear fit for the runway
The luxury partnership “redefines” summer ready-to-wear.
Love Bug: Trilobites Had Extra Limbs To Hold Onto Partner During Mating
“There’s about 20,000 described trilobite species, but less than 40 species have preserved appendages. 
From analysis to good news, read the world’s best news in one place
How Senegal is decolonising its heritage and re-imagining an African future
On the morning of 5 September 2017, the inhabitants of Saint-Louis, a regional capital on Senegal’s northwest coast, woke to…
Ghana's high school system sets many students up for failure: it needs a rethink
Around the world, educational research has found that students’ achievement and experiences largely depend on which school they attend and…

Five ways to start planning your pension pot even if retirement is a few years away

By Linda Howard

When it comes to our financial priorities, pensions are not often at the top of the list until you get closer to the age at which you are thinking of retiring and leaving permanent employment.

While this is somewhat understandable, not preparing for your pension is a common oversight when it comes to finances and can be of detriment to your financial security throughout your life.

Claro Money’s Mental Health Report recently revealed that over a quarter of UK adults (28%) admit to living for the day and letting tomorrow take care of itself when it comes to finances, while only 34 per cent of those aged between 25 to 34 had a pension plan in place.

To help those who want to understand more about their pensions and take the steps to maximise this, Rachel Harte, Head of Financial Planning, has shared five ways to start planning your pension, whatever your age.

Understand your pension

If retirement is a milestone likely to be decades away for you, then the word pension may not be at the front of your mind, however, regardless of your age or how far away retirement may be, it is essential to understand and be educated about your pension.

Whether you’re starting a new job or have simply never spoken to your employer about pensions, investigate what schemes they have in place and how these work - find out if you are eligible for the pension based on your salary, if you have been or will be auto-enrolled, and whether this pension is flexible when it comes to increasing your contribution.

Building your understanding of both the pension schemes available to you, and pensions as a financial concept more generally, will help empower you to make smarter and more conscious financial decisions.

Think about retirement

While the age you retire is in part dependent upon your financial circumstances, it is also a very personal decision.

Even if you are just entering the working world, think about when you might like to retire.

Think about whether you envision retiring as early as you can, or if you imagine as long a working career as possible. This will impact the emphasis you put on saving for your pension and how you may want to approach your career in general, so it’s important to start considering when you want to retire as early into your working life as possible.

Of course, this is subject to change, but you can start to research how much you would need to save for how much you would need to live comfortably once you stop working and what contributions you will need to make, based on when you want to retire.

Set your financial goals

Building up your pension is a long-term financial goal, however the impact this will have on your outgoings and savings will be very much experienced now.

When it comes to organising your finances, setting goals is key to developing good habits and helping you to get the most out of your money.

From setting a target for your emergency savings fund, buying a new laptop, to saving for your first home, these goals should range from expenses you want to make in the not-so-distant future to long-term goals and lifestyle habits.

When establishing goals, don’t just think about your incomings and outgoings but your wellbeing too. For example, if going abroad and travelling is the highlight of your year, make sure you prioritise saving for this.

Or, if you find going to a gym and working out with a personal trainer aids your mental health and overall mood, then cut expenses elsewhere so you can afford this. Perhaps it is building up your overall savings and pension that will ease financial and general stresses the most.

Regardless of what they are, setting these goals and working on establishing how you need to both save and spend to achieve them is key to developing good money habits. It is also helpful in understanding if, after setting aside funds for your goals, you have any money to spare to put towards your pension in addition to the amount you are currently paying each month.

Adjust your contributions

Review your financial goals and if they need a bit of tweaking, then take the steps to do so. Your pension contributions shouldn’t be stagnant and fixed throughout your working life.

Often, your employer will provide you with the opportunity to increase your monthly contributions to your pension, up to a certain percentage of your salary. Or you can chat to a pension planner or financial coach about what private pensions are available that might suit you.

Opting for a private pension gives you another opportunity to boost your savings for retirement, with many of these investing money in stock market-linked funds which gives you the potential to grow your savings over the long-term.

On the other hand, there may be periods in your life where you cannot contribute the same amount to your pension as you have been doing, or you may struggle to contribute altogether.

For example, if you are on maternity leave or retraining and in between jobs. While this often can’t be avoided, it is important to consider the impact of this on your pension and try to offset this by contributing more to your pension once you are in the position to do so.

Keep on top of your pensions

As we move to different jobs within our career, it can be easy to lose track of the different pension pots we’ve contributed to.

Employers will have different schemes in place, so it’s important to keep note of which providers you have used in the past or speak to previous employers, if you cannot find this information.

Combining all your pots so that your pension contributions are all in one place is a simple way to stay organised and keep on track of how much you have saved so far.

When moving to a new workplace, you may want to consider transferring your pension pot from your last job over to your new one.

Claro Money is the UK’s first digital financial coaching app, offering affordable and accessible qualified financial guidance to everyone in the UK.

Users can speak to a financial coach, build a financial plan, and choose from a range of saving and investment products - find out more on the website here.

Get the latest money-saving and benefits news sent straight to your inbox. Sign up to our weekly Money newsletter here.

What is inkl?
The world’s most important news, from 100+ trusted global sources, in one place.
Morning Edition
Your daily
news overview

Morning Edition ensures you start your day well informed.

No paywalls, no clickbait, no ads
Enjoy beautiful reading

Content is only half the story. The world's best news experience is free from distraction: ad-free, clickbait-free, and beautifully designed.

Expert Curation
The news you need to know

Stories are ranked by proprietary algorithms based on importance and curated by real news journalists to ensure that you receive the most important stories as they break.