How Having The Wrong Date Can Lose You Money ?
Did you know that millions of savers lose a thousand pounds from their pension pot? Yes, you heard it right. In fact, recent studies show that individuals with workplace pensions lose approximately £10,000 or more depending on the situation.
But why pension savers lose that big amount of money? How to know whether or not your pension is categorized as a lower-risk fund? How can you make sure your retirement age is correct? Good questions! Here’s everything you need to learn .
Possible Reasons Why You Lose Some of Your Pension
People with a defined contribution pension place the funds with a de-risking or lifestyle function.
As your retirement is fast-approaching, your pension pot is moved to a lower, medium or high-risk fund to protect it from an abrupt dip in the market. However, the retirement age set by a provider can cause such a scenario.
Here are the reasons why pension savers lose out:
Retire Later than the Retirement Age Set by a Specific Provider
When you end up retiring beforehand, your pension will move to a lower-risk fund. Although it is an attempt to protect your pension from market crashes and other potential problems, a lower-risk fund generates less growth, which in turn can affect your pension pot and lose approximately £1,000.
Retire Before the Planned Retirement Age
When retiring before the retirement age you planned , your pension pot will be categorized as a higher-risk fund. Then, it gets more exposed to a decline in the stock market.
While it is unknown how many pension savers are affected by the issue, experts believe that it’s around millions of people.
How to Check Whether or Not your Pension is in a Lower-Risk Fund?
Losing a thousand pounds from your pension savings can be a headache. But you can avoid such a painful and frustrating incident.
Determine if your pension is categorized as a lower-risk fund is a good start. How are you going to do that? It’s simple! All you have to do is to dig out the necessary documents. When you find nothing, it’s time to contact the provider of your choice. Of course, you have a hectic schedule. But find ways to call the company for your financial safety and security .
How to Make Sure Your Planned Retirement Age is Accurate ?
Usually, employers set a default retirement age for workers as soon as the latter set up their pensions. The good news is that you can set your own retirement date. To do that, just contact the pension provider ahead of time.
Aside from calling the company, there are other options to check your retirement age . Depending on a provider, you can change the data online. When you’re not that tech-savvy to fill out forms over the net, just contact the pensioner for your convenience. Perhaps, the company has a dynamic and professional team that you can count on and trust all throughout the process.
So, it is important to check your pension pot regularly. Also, don’t forget to seek assistance if possible.