Don’t panic - pension saving doesn’t need to be stressful, but 1 in 3 concerned

• When it comes to retirement planning, nearly two-thirds of UK workers are unsure if they are saving enough money into their pension.
• A third are left feeling anxious once they’ve checked the value of their pension, while a fifth of workers feel motivated to boost them by saving more.
• A quarter of workers feel reassured and confident after reviewing their pension savings.

Royal London’s latest research into workplace pensions and long-term saving, reveals the current approach to saving for retirement taken by UK workers* leaves six in 10 sensing they’re not saving enough. A third are left feeling anxious once they’ve looked at the amount they’ve saved.

It’s not all doom and gloom though, with around a quarter comfortable they are saving the right amount, and a similar proportion feeling reassured and confident after reviewing their pension savings.

The level of contributions workers and their employers make affects the lifestyle they will enjoy in retirement, yet a fifth currently paying into their pension have no idea how much they contribute every month.

Many employers offer valuable pension matching and, encouragingly, two fifths of workers say they pay more than the standard amount into their pension, which their employer matches pound for pound.

Staying on track with savings

Having a firm monthly savings target and regularly checking how much you have saved is key to achieving a good retirement savings pot.

Checking a pension pot is usually simple, with easy access to information online or through an app. Crucially it can make all the difference to help people work out if they’re on track for the retirement they want. And even if they’re not, they may be able to take actions to boost their pension savings now or in the future, such as when they receive a pay rise or bonus, for example. It can also provide a clearer idea as to whether their saving levels will allow them to retire at the age they want to, especially if that’s earlier than State Pension Age.

Ostrich syndrome

The findings from the research showed a wide gap in the frequency people check the amount they have saved. One in eight people admit to burying their head in the sand and never checking. 

At the other end of the spectrum, even though their pension is a long-term savings plan, one in six workers said they checked their pension savings at least once a week, with one in 10 checking multiple times a week.

The most common approach is checking annually (19%) or when a statement is issued (11%).

Worryingly, of those who don’t check how much they have in savings, a quarter said they didn’t know how to and one in 10 say they can’t check because they’ve lost track of their log- in details or paperwork.

Sarah Pennells, Consumer Finance Specialist at Royal London, said:

"Retirement can often feel a long way off, but it’s a good idea to keep on top of your pension savings throughout your career. Making good decisions at an early stage in your working life could put your retirement plans on a good footing for decades to come. Reviewing how much you’ve saved helps you stay in control. It also helps you focus on making a clear and concrete plan, which can reduce your anxiety and help you decide what age you want to work until. Even if you don't intend to retire, establishing a date when you can financially manage your expenses without needing to work, can serve as a significant motivator.

"Your pension is a long-term savings plan so it’s sensible to strike a balance on the frequency you check your savings. Checking at least once a year should give you a clear picture of how your savings are performing and help you decide whether you want to make any changes. For example, choosing different funds, increasing or lowering your risk appetite or even making several pension pots easier to manage by putting them in one place."

Top tips to take the stress out of pension saving

1. The best preparation for your long-term future is to start saving as early as you can. Starting saving for retirement in your twenties gives your money the maximum time to grow. Putting it off until you think you can comfortably afford it may be a couple of decades in the future.
2. Check in on your pension pot regularly (at least once a year), but don’t be tempted to check on it frequently if the ups and downs of investing are going to raise your stress levels. Pensions are designed to be long-term investments.
3. When you get a pay rise, try and allocate some or all the extra money into your pension.
4. Investigate whether your employer offers pension contribution matching, where your employer will pay in an extra pound for every pound you contribute to your workplace pension, above the default or standard amount. This allows you to maximise your savings.
5. Make a retirement plan. Think about when you want to stop work and, crucially, how you’ll spend your time when you retire. That will make it easier to work out how much retirement will cost you.
6. You don’t have to do it alone, there’s plenty of guidance and advice available. Your pension provider may offer tools and calculators. Managing your pension can feel complicated, so seeking expert financial advice on your pension savings and your retirement options is recommended. There’s also lots of information and guidance at the independent and government-backed MoneyHelper website. For more information on the help you need, tailored to your current circumstances, visit this page from Royal London.