If you have entered 2022 with the motivation to organise your finances, one way to get off on the right foot is to review your pension. The new year is the perfect time to make positive financial changes, no matter what stage of life you are at.

Whether you’re due to retire, still a long way off, or already in retirement, there are administrative tasks you can tackle now that could have huge benefits in the future.

Here are 10 important pension tasks to complete in 2022.

Saving for retirement

1. Consider your retirement plans

Even if you already have retirement plans in place, it is always worth reviewing them.

The Covid-19 pandemic has shaken up many people’s plans, and it could be that yours seem outdated when you look at them again. Do you still want to retire at the same age? Have you recently switched careers? Does your dream retirement look different post-retirement?

By updating your retirement plans now, you’ll have a more realistic view of your future and might even be more motivated to achieve your goals.

Key task: review your current retirement plans and update where necessary.

2. Think about increasing your contributions

It is an unavoidable fact that life is becoming more expensive. According to a report from the BBC, inflation in the UK reached 5.1% in November 2021 – more than double the Bank of England’s 2% target.

Simply put, increasing your pension contributions can help shore up your fund against rising prices. Even if you are decades away from retiring, it is never a bad idea to up your pension contributions if you can.

Key task: check your pension contributions and see if you can increase them.

3. Consider pension consolidation

If you have changed jobs several times in your career, or perhaps you are expecting to change jobs soon, you may end up with several pension funds to keep track of.

You might consider consolidating your pensions, either to reduce fees or make it easier to keep track of your savings. Be aware too that consolidating pensions could mean you lose valuable benefits.

Speak to us and we can help you decide on the right option for you.

Key task: get up-to-date valuations of all your pensions and be sure to speak to us before you decide.

Approaching retirement

4. Take a fresh look at your retirement options

You may already know how you want to draw your pension when you retire. Nevertheless, a fresh glance at your options can help you crystallise your plans.

For example, if you’re planning a once-in-a-lifetime holiday once you retire, you might opt to take a lump sum. If your plans involve spending a year travelling around the world, drawdown might be a better option, allowing you to withdraw funds when you need them.

We can work with you to create a plan that will provide the sustainable income you want in retirement. Get in touch to find out how we can help.

Key task: think about how you may want to draw your retirement income and speak to us for advice.

5. Complete an “expression of wish” form

The pension pots you have yet to take will generally fall outside of your estate for Inheritance Tax purposes. Rather than using a will to nominate a recipient of your pension funds when you pass away, you’ll need to complete an “expression of wish” form with your provider.

This lets you nominate who you would like your pension to go to when you die. If you haven’t yet named a beneficiary, contact your pension provider for more information now.

If you already have, certain life events – such as a marriage or divorce – might mean it needs updating. Be sure to check in with it to make sure it aligns with your wishes.

Key task: complete an expression of wish form or update your current form.

6. Consider the role of your non-pension income in retirement

While your pension is likely to form the bulk of your later-life income, your investments and savings also have a significant part to play. You might also receive income from part-time work or businesses you own.

Assets such as Premium Bonds, properties you let out, or ISAs may provide you with additional income that can help you achieve a more comfortable lifestyle in retirement.

Juggling pension and non-pension income effectively can be difficult so be sure to speak to us.

Key task: get up-to-date valuations for all your investments to check that they are on track.

In retirement

7. Check that your spending is sustainable

Most of us want to prioritise relaxation during retirement, so it’s important not to let financial stress get in the way.

One way to alleviate this stress is to revisit the amount you are currently drawing from your pension, and check that this will be sustainable going forward. If you’re drawing a little too much each year, you may be in danger of running out of money later in life.

Being realistic about your annual retirement spending should help take some of the stress out of your day-to-day life in retirement.

Key task: review your spending. We can help you to work out if you’re drawing a sustainable amount.

8. Understand the impact of inflation

As the rate of inflation in the UK continues to rise, it may be useful to take another look at your retirement budget.

One way to tackle inflation head-on is to check the returns on your current savings and investments and review these with a professional. For example, there may be options for you to invest your money to help it keep pace with inflation.

Key task: consider the rate of inflation and how to inflation-proof your wealth.

9. Review your estate planning

Research from Just Group, published in the FTAdviser in October 2021, found that 12% of over-70s in the UK do not have a will. The same study found that more than 30% of people over 75 have no Lasting Power of Attorney (LPA) in place.

Even if you have a will and your estate planning is up to date, you may find it beneficial to review these in 2022.

Key task: update your estate plan.

At any stage of your retirement journey

10. Be sure to get professional financial advice

No matter your stage of life, meeting with a financial planner can greatly improve your retirement outcomes. It is always helpful to obtain professional advice when it comes to making the most of your hard-earned money.

Key task: meet with a financial planner to discuss your retirement goals.

Get in touch

With decades of experience in financial services, our Chartered financial planners have the expertise to help you and your loved ones make the right financial choices. If you have any questions, please get in touch and speak to us today.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.