When can I retire? It’s a question I suspect even those of us who enjoy our jobs muse on from time to time — especially on Monday mornings after a nic
When can I retire? It’s a question I suspect even those of us who enjoy our jobs muse on from time to time — especially on Monday mornings after a nice summer’s weekend.
But for such a common and important question, it’s surprisingly hard to answer.
Sure, you can check at what age you become eligible for a state pension. But that is only one piece of the jigsaw.
That won’t tell you what you really need to know, which is at what age you’ll have enough squirrelled away to achieve the retirement lifestyle to which you aspire.
To work that out is a serious faff. First, you need to track down all of the pension pots you hold.
Pot luck: Workers have around 11 jobs over the course of their lives – with different schemes for each – so that’s a lot of pensions to keep track of
Workers have around 11 jobs over the course of their lives — with different schemes for each — so that’s a lot of pensions to keep track of. It’s no wonder that between us, we’ve lost track of pension pots worth more than £26 billion.
Then you need to find out how much you have saved in each pension.
You can do this by scrutinising the pension statements that your providers are obliged to send you every year.
But these are often out of date by the time they land on your doormat, and are not always easy to read.
Plus, there’s a chance you won’t receive yours at all because it’s so easy to forget to notify old pension providers of new contact details when moving home.
Alternatively, you can check your statements online. But this involves setting up log in details for each pension scheme and navigating often clunky websites.
Next, you need to get a state pension forecast to find out how much you are on track to receive every year.
You can find this at gov.uk/check-state-pension. However, forecasts are sometimes flawed, so scrutinise yours carefully and challenge the Department for Work and Pensions (DWP) if it looks incorrect.
Armed with all this information, you should now have the basic tools to work out what kind of income your savings could generate in retirement.
You can head to an online pension calculator that should spew out a number if you input information about your pension savings. Most pension providers offer one.
All of this is very much worth doing — but arduous. Now, what if I told you all of that could be done for you? Imagine if you could just log on to one website and see all of your pensions in one place.
Well, that’s exactly what is coming. But, sadly, not for at least another three years.
The pensions industry and Government have been working together for years to create a pensions dashboard, where we should be able to see all of our pension information in one place.
In 2016 the financial watchdog recommended that one should be available in 2019.
The Government agreed, but since then, the dashboard has faced delay after delay. Last week it was pushed back again — this time to 2026.
It’s not an easy project as a lot of providers need to work together and provide reams of data. And it needs to be right from the start otherwise we won’t trust it. But missing the deadline by seven years is hugely disappointing.
We can’t afford more delays. We know most workers are not saving enough to achieve the retirement they dream of. But it’s very hard to fix that while people have no real oversight of how much they have — and, therefore, what the shortfall is.
I’m sure once presented with the yawning gap between how much we have and how much we need — written there in black and white and in pounds and pence — that might be just the kick up the backside required to get us to save more. I hope that it won’t be too much longer until, when you find yourself fantasising about ditching the nine-to-five, you’ll be able to log on and check how far off that dream is from reality.
However, there are some pension deadlines that should be delayed. At Money Mail we’re so relieved the DWP has finally listened to us and given workers more time to boost their state pensions (see pages 27-29).
Thank you to readers who have contacted us with your frustrations over trying to get through to the DWP. We feel for you and, as always, are here to fight your corner.