While this season will be filled with romance for many people, an expert is encouraging people to give more attention to their pension. As a pension can be one of the most valuable assets a person will ever hold, it could make a huge difference to a person’s lifestyle in later life.
Express.co.uk spoke exclusively to Shona Lowe, financial planning expert at abrdn, who explained how Britons can give their pension “a little love” today and going forward.
Firstly, Ms Lowe said it is vital to make sure a person and their pension are “on the same page” – meaning they are on track to meet their retirement savings.
She explained: “Regardless of your age, it’s important to roughly forecast this and have a plan to work towards.
“Much like a relationship, if you’re not on the same page, things could go off track, so working towards a set goal will make things much more achievable.
READ MORE: State pensioners could get £3,300 annual boost
Basic rate taxpayers will get 20 percent, but higher or additional rate taxpayers can benefit from 40 or 45 percent respectively.
People can usually contribute up to the annual allowance of £40,000 into their pension while still benefiting from tax relief.
But there are some exceptions to the rule, and in this case, it may be worth seeking financial advice.
Ms Lowe recommends “taking it slow and trying not to rush into anything” when it comes to a pension.
While the rising cost of living can cause panic, it makes sense to avoid dipping into one’s pension pot to help with present demands if possible.
The expert continued: “A pension pot’s purpose is to cover you financially in later life and you can benefit more from any investment growth if you have as much in there as possible.
READ MORE: Banks offerings ‘excellent’ savings interest rate of 4%
“Withdrawing money early reduces that pot size and takes away some of what could grow, particularly if you take money out when investment returns are low.
“It might help to plug a gap in the short term, but you could lose out in the long term.”
For example, experts estimate a £250,000 pension pot at age 55 would be worth £380,000 if a person were to leave it for a further 10 years – a boost of £130,000.
Ms Lowe also said Britons may wish to use the opportunity to “come together as one”, consolidating their pension pots.
It can often be complicated to manage each pension arrangement, and as a result, easy to lose track of money saved.
There are approximately 2.8 million lost pensions in the UK, worth about £26.6billion – so looking into consolidating could be right.
However, the option is not suitable for everyone, as certain individuals could have valuable benefits in a pension which may be lost by moving out of the arrangement.
If a person wants to be reunited with their pension, they can use the Government’s online Pension Tracing Service.
Finally, Ms Lowe states people should never be afraid to get support.
She stated: “If things weren’t working out in your relationship, you would speak to someone you trust.
“And the same should go for your pension, whether that is speaking to a loved one, or getting professional advice.
“Many dismiss the idea of working with a financial adviser, but an adviser can help you ensure you have a plan for your financial future, that takes all your goals and plans into account, allowing you to concentrate on what you enjoy doing.”
People can get impartial guidance for free from Pension Wise, or can seek out the support of an independent financial adviser at cost.