Pension Expert Sessions

Most people have several jobs over their lifetime, and in every job you have, your employer will usually provide you with a pension.

This means that many of us have started to stack up a number of pension pots (A) across different employers and pension providers.

It can be hard to keep track of how much you’ve saved across a number of pensions, so many people look at combining them together into one, easy to manage, pot.(B)

You can combine existing pensions into your current workplace pension scheme or a separate personal pension, whatever works best for you. The benefit is that it can make it easier to keep track of and manage your pension savings. 

If you do want to combine your pensions you can find out more information on our website. (1) However, you should be aware that some older pensions may have guarantees or special features you’ll lose if you transfer them. You might be charged for moving your pension too. 

If you’re unsure about any of this then speak to a financial adviser, your pension provider or visit the MoneyHelper Website. (2) If you don’t have a financial adviser you can find one on the unbiased website. (3) It’s worth remembering they’ll normally charge for any advice given.

The first step to retirement planning is finding out how much you currently have in your pension. This means looking at any pensions you may have had over the years, potentially tracing any lost pensions, and checking how much is in them. 

To help you know how much your pension is currently worth your pension provider should send you an annual benefit statement every year telling you the current value of your pension, and how much you might get when you get to retirement. If you haven’t received this or want a more up-to-date figure you can contact your pension provider directly. You can usually do this over the phone but with many pension providers you can also check your pension value online, or through an app.  

If you don’t think you’ve received your annual benefit statement it’s worthwhile checking your pension provider has your most up-to-date contact details so they can keep in touch. 

When checking the value of your pensions it can also be a good time to track down any pensions you’ve lost sight of. Think of any pensions you may have paid into through old employers for example. If you can’t remember your old pension provider or have contact details for your employer the Government has a free service that can help you trace any lost pensions. It’s really simple and you can do it all through their website (1).

Once you’ve added up the value of all your pension pots it’s worthwhile checking if you’re on track for the retirement you want. Our calculator can help you add up how much you’ve got, with what you’re currently saving to give you a projection of when you could retire. You can try it out now on our website (2).

Although it’s important to remember that as with any investment the value of your pension can rise and fall over time.

When thinking about how much you’ll have in retirement you should also factor in any State Pension you may receive. The State Pension you may get depends on how long you’ve been paying your National Insurance contributions so it can differ for everyone, but the full State Pension is just over £10,600  per year.   You’ll usually be in your late 60’s by the time you receive it, but you can find out exactly when you’ll get your State Pension on the Government website, as well as a forecast on how much you may get (3). 

For more information or to get an idea of how much you may need in retirement our (4) website can help. The Government also offer free guidance through (5) MoneyHelper or if you’re in your 50’s then (6) Pension Wise can help you make the most of your pension options.

Hi, I’m Robert and I’m a Retirement Expert at Scottish Widows. 

The earlier you start a pension plan, the better. But if you don’t have one, don’t panic. It’s never too late start  saving for your retirement. (A)

As you get nearer to your chosen retirement date it’s important to start thinking in more detail about what your plans are and what you’ll need to retire on. You can usually access the benefits from your private or workplace pension when you turn 55, but it’s worth remembering you’ll likely be in your late 60’s before you receive any State Pension. (B) If you find you’re on track for the retirement you’re working towards then great, but if not you may want to look at boosting your pension. 

We recommend you aim to save at least 12% of your total pay into your pension (1). This is made up from the payments by both you and your employer along with any tax relief from the Government. 

There are several ways you could pay in a little extra. You could make a one-off payment into your pension or increase how much you pay in regularly. Any extra you pay in will normally benefit from tax relief. If you’re employed, we recommend you speak to your employer first as there might be a benefit if you do this through them.  

A small increase now could make a real difference to your future. 

We have some really useful pension calculators (2) that can give you an idea of how much you should think about saving each month to reach your retirement goals, and how a small increase now can really add up in the future.  For more information visit our website. (3)

It is important to know what will happen to your pension when you die, and how it will be left to your family or significant others. 

In what will be a difficult time for them, we know you’ll want to make sure they’re covered. 

If you die before the age of 75 and you’ve not already accessed any of your pension then (A) the value can be paid to your beneficiaries tax free, providing it’s less that  the Lifetime Allowance.

If you die aged 75 or older (B) your pension can be paid as a lump sum or as an income  which will be taxed at your beneficiaries’ personal rate of tax. And these options may change if you have accessed your pension already.

There (C) is normally no Inheritance Tax to pay on pensions, but it is worth checking with the pension provider as it can depend on how it is set up.

You can let your pension provider know who you would want to leave your pension to in the event of your death by completing a nomination or expressions of wish form. While this is not binding, it will be taking into account when paying death benefits. It’s therefore really important to keep this information up to date as your wishes and circumstances change. 

Contact your provider as ask for a nomination or expression of wish form to nominate who should inherit your pension. 

Visit the Scottish Widows  website to find out more. (1)

When going through a divorce or dissolution, pension savings can be forgotten about, but by law they need to be taken into account. 

One partner could have built up more pension savings than the other and quite often pension pots can be the biggest asset after the family home. (A) But our research suggests pensions are often overlooked with seven in ten couples not considering them during divorce proceedings. (1)

There are many different ways pension savings can be taken into account during a divorce. Pension sharing will divide the pension pot into two and transfer part to your ex partner in a new policy. Pension attachment or earmarking ring-fences an agreed proportion of the total funds and benefits for each party, with your former partner collecting their share when they reach retirement. 

Alternatively, assets to the value of the pension pot can be given to one partner while the other keeps their pension pot intact. For example, you could keep your pension pot and your former partner keeps the family home.  This is known as pension offsetting.

These approaches can lead to very different outcomes, so it’s worth thinking what works best for your circumstances.

Once you have divorced, you should look at how much you’re saving into your pension as you may need to alter your contributions to make up for the loss of a partner’s pension pot in retirement.

Speak to your lawyer to find out more information on the options available to you or visit the MoneyHelper website. (2)

Your working pattern has an effect on your pension as the amount people save into their pension is generally a percentage of their salary.  Anything that reduces your income such as reducing your hours to part time, a drop in salary, taking time out to care for dependents or family members, could directly impact your pension and ultimately your pension pot when you retire, but there are steps you can take to help.

The first step is getting to know your pension, remind yourself how much both you and your employer are contributing each month and what it could be worth when you retire.  If you’re considering reducing or stopping your contributions you could try adjusting the contribution levels to see what impact this will have on your final pension pot. Scottish Widows has lots of useful calculators to help you do this.   

If you’ve taken time off to start a family and you’re a member of your employer’s workplace pension scheme then they’ll continue paying their contributions into your pension.  They’ll continue to do this while you’re on paid maternity leave however, they’re not required to continue during any period of unpaid maternity leave but it’s certainly worth speaking with them and see if you can come to some arrangement with them and what works best for you in the long run.

If you decide to return to work on a part time basis your salary will likely be lower and this will reduce both your and your employer’s contributions into your pension. It’s worth considering if these reduced contributions are likely to give you enough to support you in retirement and if not can you pay a bit more each a month. Even a little amount extra every month can help make a difference when you come to retire.

If you have a partner it’s worth considering how they can share the impact of reduced contributions as they may be able to pay into your pension on your behalf and any contributions they make could potentially benefit from tax relief. This could help counter balance the reduction in your contributions.

You’ll also still qualify for the State Pension as long as your earnings meet the National Insurance lower earnings limit (£6,240 for tax year 2021/22, Source Gov.uk)  but if you decide not to return to work your pension will remain with your pension provider until retirement.  By claiming Child Benefit, you’ll get National Insurance credits which will count towards your eligibility for the State Pension. You can check eligibility rules on the Government website.

 If you’re self-employed you have the freedom to decide how much leave you want to take and how much you want to put into your pension.