New Year 'ideal for retirement income check'

08 January 2013

Many people will have made New Year resolutions in the last couple of weeks, with a popular option likely to be to improve their financial situation.

Retirement planning can be a complicated and difficult area to work through, but the new year provides an ideal opportunity for individuals to check they are prepared for their post-work lives.

Health check

Julian Webb, head of retirement savings at Fidelity Worldwide Investment, stated that a pension health check should be on the agenda for all people this year.

He explained there are five questions that new and existing pension savers should ask themselves as they decide if they are prepared for retirement.

The first of these is to embrace the government's auto-enrolment scheme, as well as to consider joining an employer's pension scheme voluntarily.

"You could benefit from £10,000 more in employer pension contributions over a decade," said Mr Webb, who added individuals need to make sure they do not forget about any of their pension pots, no matter how small they may be.

Review contributions

Other steps recommended by the specialist included reviewing contributions to workplace pensions, working out how much to save on top of state pension for a comfortable retirement and examining other retirement finance options.

For those older homeowners who are concerned their pension provision is not going to be enough once they give up work, another choice for them could be to use equity release to unlock money from the value of their home.

This is a flexible way to boost a financial position for those about to retire and it is likely to become increasingly popular over the course of the next few years.

Jason Hollands, the managing director of London-based Bestinvest, recently told the Financial Times that he believes the pension gap could be set to widen even further over the course of 2013.

He explained this is because continued economic uncertainty, high taxes and inflation are all factors having a negative impact on the public's willingness and ability to put money away for their future.

For more information about how equity release can work for you, contact Key Retirement Solutions for details and advice.