Pensions is the New Black
It’s London Fashion Week 2017 and the capital is awash with designer names and catwalks full of clothes, from the exotic style to the minimal chic. Such an excess of fashion choices might explain why in the 1970’s we saw the entrance of the capsule wardrobe, designed to provide a simple way to timelessly style yourself with the essential wardrobe items. The concept was further popularised by an American designer called Donna Karan who released her "7 Easy Pieces" collection.
This got us thinking, what if we had a collection of steps (opposed to items of clothes) that consumers could use to take away some of the worries that people encounter, when thinking about or engaging with their pension savings. So, here are our ‘7 easy steps’:
- Be open – Saving into a pension might seem complicated or unaffordable but, whatever age you are, you should be open to the benefits that pensions offer when saving for later life. Pensions have many benefits including receiving tax relief on contributions, benefitting from your employer paying in and flexibility in how to access you money post age 55 or earlier in special circumstances such as ill health.
- Be honest about your lifestyle – You should be honest about your financial needs now and in retirement, making sure that you’re putting away enough for later but not so much that will impact today. You should consider what bills you might need to pay (including a mortgage or rent) and any other expenses. Take into account how much State Pension you may have and what will need to be covered by other income.
- But, the more you save the better - We understand that today’s need can make it hard to find money for savings. But, it’s important you put money away for your later life. Pay rises or bonuses make great one off contributions and, remember, what you put in now will pay off for you later.
- Be prepared for changes – like fashion trends, we know that life can change unexpectedly. When you have a change in circumstances (for example bereavement, loss of a job, getting divorced or becoming a parent), your pension may be affected. Make sure that when your circumstances change, you keep check on what it means for your retirement plans. (We offer appointments for people who are getting divorced and are trying to understand the implications on their retirement plans.)
- Don’t be afraid to shop around – not all the best outfits are straight off the runway and the same can be said for your pension. Don’t be afraid to shop around to make the most of your money. Different providers offer different products, rates and charges, which may suit your needs more than others.
- Be aware of scammers – the fashion world is full of fake Chanel, Gucci etc. and so is the pension world. Your pension is one of your most valuable assets, but, like anything valuable, it can become the target for illegal activities, scams or inappropriate and high-risk investments. If it sounds too good to be true, it probably is.
- Seek help and guidance – just like fashion, sometimes you need an impartial friend to be honest about your choices. So remember, if you ever have a question about your pension or about pensions in general, you only have to ask us for help. Our guidance is free and impartial, and available no matter what stage of life you’re in.