Not everyone has access to a financial planner who will build a financial plan to illustrate their personal cash flow requirements for a lifetime.
Amongst other things, a good planner will take account of the pensions you have accrued, those you will continue to accrue up until you retire and your State Pension forecast. For those not working with a planner, the Department of Work and Pensions (DWP) has launched a marketing campaign designed to help you find and collate all of that information together yourself.
Hunt the pension
Finding your old pensions that you may have lost track of can be incredibly challenging. There are many companies, like AgeWage, providing services to help you track down and analyse your various pensions, but it’s not easy.
The DWP estimates that unless we get a bit better at it, we will have 50m abandoned pension pots by 2050. Today over £20bn is lost to members and policyholders (according to the PPI).
(I interviewed the founder of AgeWage, the passionate pensions-bod Henry Tapper on The Retirement Café podcast about this very topic. You can take a listen here.)
The DWP’s new gnome campaign doesn’t go as far as solving the issue of tracking down our lost pensions, but it is designed to help you understand what you need and may already have in place for retirement.
Getting to ‘gnome’ your pensions
The new website brings guidance about planning for retirement already available on a number of other government sites into one place.
“Will the retirement you get, be the retirement you want?” is the question posed by the colourful gnomes, making the point that it’s important to plan carefully for your retirement – regardless of your age.
The website provides guidance on how to check your State Pension, prompts you to consider important factors about your retirement and enables you to take steps to plan for your retirement using the pension calculator.
The pension calculator takes account of savings in pensions, but not your other assets, which is what a comprehensive financial plan will illustrate.
Any guidance provided to help people plan more effectively for retirement is welcome.
A survey* from 2017 revealed that a third of over 50s – 15 million people – have no pension savings, aside from their State Pension. According to research by Royal London in 2018, you need a pension pot worth £260,000 to provide an income of £9,000 a year, which is deemed will provide a ‘comfortable’ retirement.
But your comfortable retirement is likely to be very different from someone else’s comfortable retirement.
On the website you can follow a retirement checklist which suggests steps you can take to increase your retirement savings, dependant upon your stage of life.
It’s positive to see the DWP launching a retirement-focused website and associated marketing campaign. Whilst the website is, understandably, fairly basic in its structure, if it triggers some of the millions of Brits not currently saving for retirement to consider what they could do – without the jargon – that has to be beneficial.
After all, I understand how important it is to help people plan for a successful retirement.
* Survey by the Financial Conduct Authority of 13,000 people in 2017.