If you think you are saving enough for retirement, just consider some of these shocking figures from a new study looking at pension savings.
Three out of four retirement savers aged under 45 years old have no idea of the current value of their pension funds.
Even more of them – four out of five – do not know what the pension fund is likely to be worth when they retire.
To complicate matters, many retirement savers (43%) have two or more pensions.
According to the firm compiling the figures, pensions giant Standard Life, few people know the combined value of their pensions.
Monitor retirement savings
Only a quarter of under 45s have even a close idea of how much they have saved and even less – just a fifth – know how much cash to expect when they retire.
The firm suggests that all retirement savers should monitor their pensions to make sure the funds are performing as expected and to see if any changes could improve the return on investment.
Other errors many savers make include forgetting to add the state pension into retirement income and not starting to save early enough.
Investors who start saving younger gain more by saving even a small amount – Standard Life calculates saving £100 a month aged 30 could see a pension pot grow to £58,000 by the age of 65.
However, not saving until aged 40 means a much smaller pension pot – that £100 a month will grow to only £37,600 by the time the saver is aged 65.
Consider consolidation
The firm’s Alistair Hardie said: “It seems most of us don’t know the value of our pensions until we are approaching retirement and starting to work out how much money we need and how much we have.
“Keeping an eye on savings early on gives time to react to changes in the markets and pension laws, so savers do not lag and then have to try to make up a lot of money in the years before they give up work.”
The research also found having multiple pension funds is a problem for many savers.
Many lose track of their funds as they change jobs and most do not know what the total fund is likely to be.
“Having more than one pension can let people easily lose touch with their savings. Consolidating them into one fund is worth considering in many cases because savers are dealing with one provider and seeing only one annual statement,” said Hardie.
