Am I saving enough and when can I access my money?

• How to find out your current pension pot
   
• How often you should be updating or assessing your plans
   
• Key pension concepts and jargon, from annuities to flexi-access drawdowns

Dreaming of your ideal future and planning your best life is over for now. It's back to reality as we work out how to take stock of what we have, work out what we need and when we can finally grab that cash.

1. If you are working and paying tax, or have done, you can check your state pension forecast with Gov.uk. 
    
2. ISAs, including LISAs, can be used as part of your pension. If any of the money you have in these is for your retirement, tot that up.
    
3. Your retirement income could also include cash deposits, share-based investments, or property (especially if you rent it out).
    
4. You'll need to know where your other pension pots are if you have any. Think of anywhere you've been employed and if they have enrolled you. 
    
5. Do you have a pension pot with your partner? 

Your current pension is the total of the above. Take your time to make sure you've found and recorded every last penny. 

Now breathe a big sigh of relief! That's a good bit of hard work done. 😅

Technically no, but there is a cap on how much you can contribute each year and how much you can take out (drawdown) in your lifetime.

If you have an employers pension, private pension, or overseas pensions scheme that qualifies for UK tax relief, there is a limit to how much you can save tax-free every year:

• If your pension contributions go above 100% of your total yearly earnings.
   
• If your pension contributions exceed the annual allowance (£40,000 2021/22).
   
• If your pension goes over your lifetime allowance (£1,073,100 2021/22).

The most likely result of making a plan once and never reviewing it again is a disappointment. You've gone through all the trouble of planning your future, don't forget to amend it.

Most pension providers send out a yearly statement, which is an excellent reminder to look at how you're doing and confirm you're on track to reach your retirement funding goals. 

A lot can change in a year: health, relationships, parenthood, property and your career will have a significant impact on your current financial status and your long-term planning. Don't forget to ensure the future you is well cared for, regardless of life's rollercoaster!

There are pros and cons to whether you choose to diversify your pension or consolidate it into one plan.

Your age, earning potential, health, risk strategy, and retirement plans will play a part in your choice.

A big pro for diversification is safety. You can manage your risk if you have lots of small amounts in different pots. However, the con is that with money in a lot of little pots, you face higher fees overall. It's a catch 22 scenario that only you can feel comfortable with; no matter what your family or friends do, it's your money!

You can learn more about diversification here.

Most people have the right to access their pension at 55.

The age of pension access does vary somewhat. For example, people with specific careers (professional athletes, dancers and models) may have the right to take their pension under 50 as they tend to retire before the age of 55. However, this may reduce your lifetime allowance limit.

If you are under 55 but seriously ill, you may access some or all of your pension early.

Once you are 55+, you will be able to take 25% of your pension as a tax-free lump sum from your provider. You'll then have six months to take the remaining money, which you'll usually pay tax for.

When you take out some or all of your pension, you can buy a product, or annuity, to provide a set income every year. 

As with all insurance, the amount you get will depend on various factors, like how long they expect you to live, your age and gender, the size of your pension pot, interest rates and sometimes even your health.

Annuity offerings can differ. Some will offer a fixed time payment (e.g. for 15 years), and some will still pay your partner once you pass. The best annuity for you (and your partner) will depend on your needs and plans. 

You don't have to buy your annuity from your pension provider. Doing your research, and consulting a financial advisor, will always give you peace of mind. It'll most likely get you a better bang for your buck too.

As with all insurance, the amount you get will depend on various factors, like how long they expect you to live, your age and gender, the size of your pension pot, interest rates and sometimes even your health.

Annuity offerings can differ. Some will offer a fixed time payment (e.g. for 15 years), and some will still pay your partner once you die. The best annuity for you (and your partner) will depend on your needs and plans. 

You don't have to buy your annuity from your pension provider. Doing your research, and consulting a financial advisor, will always give you peace of mind. It'll most likely get you a better bang for your buck too.

It's not a new-fangled type of naughty knicker; it's a pension product. With a flexi-access drawdown fund, you'll be able to make withdrawals, buy short-term annuities, and pay into it (though you'll be taxed for doing so).

You'll be able to take some of your pension pot as cash and keep the rest invested. Your money will continue to fluctuate with the market, so if you're highly averse to risk, this might not be the best option for you. 

You've learnt the basics of your pension. Now you're ready to learn all about career breaks, National Insurance Contributions, and more. Enjoy! 😊