5 important tasks to tick off your pension to-do list in 2023

14 February 2023

When assessing your financial goals for 2023, sorting out the admin for your pensions was probably not at the top of your list.

Indeed, more “exciting” financial targets often take precedent, such as expanding your property portfolio, helping the next generation thrive, or taking a bucket-list holiday. 

Even so, your pension (while not the most spine-tingling subject in the world) is perhaps one of the largest assets to your name, and requires annual attention to maximise its potential – especially during the cost of living crisis. FTAdviser reports inflationary conditions have led to an 18% surge in the “minimum” cost of retirement.

So, here are five important tasks to tick off your pension to-do list in 2023.

1. Calculate the total value of all your pension pots

As a first step, it could be incredibly useful to zoom out and look at each of your pensions as one asset.

Indeed, if you’ve collected various pensions over the years, you may never have sat down and worked out their value from the most recent statements you received. 

Doing so can:

• Give you an idea of what you’ve invested so far
• Help you measure your pensions’ total value against your later-life income goals
• See how close you are to reaching the Lifetime Allowance (LTA)
• Motivate you to continue contributing, or encourage you to invest in non-pension assets, depending on the value of your pension pots so far.

If you are unsure how to collate the values of your pension pots so far, it could be wise to seek guidance from a financial planner.

2. Unearth lost pensions

If you’ve lived a varied life, and explored many different employment opportunities along the way, it’s likely you are unsure how many pension pots you have at present. 

You could even have “lost” pensions that, with a provider unable to contact you after you relocate, you’ve forgotten all about.

Shockingly, International Adviser reports that the value of lost pensions reached more than £26 billion in 2022. You could have investments underperforming in old schemes, ready to be claimed and added to your pension wealth.

Luckily, you can use the government’s pension tracing service to unearth old pensions this year. This is a great item to tick off your list as soon as possible so you can work towards retirement with an accurate figure in mind. 

3. Consider consolidation

Pension consolidation can be hugely beneficial, but its efficacy entirely depends on your unique situation.

As you sit down to review your pensions, you might feel it’s time to put all your pensions in one place.

Some pros of consolidation you might consider include:

• Paying only one set of administrative fees 
• Easily keeping track of your pension’s total value year after year
• Only needing to contact one pension provider in the event of an issue, rather than several
• A simpler process when you come to draw your later-life income.

Despite the benefits of pension consolidation, it isn’t the right choice for everyone. Some downsides to consolidating your pension assets include:

• Potentially losing access to pension-linked cover that might protect your wealth in future
• Missing out on employer contributions, if you consolidate into one pot that your current employer doesn’t pay into
• Possibly exposing your pension to greater market risks.

If you’re considering consolidation, consulting an expert could be hugely beneficial before you sign on the dotted line.

4. Complete an “expression of wish” form

When completing essential administrative tasks with regards to your pension, completing an “expression of wish” form should be high up on your list.

If you’ve already made a will and planned who might inherit your assets, you might be aware that usually, your pension does not form part of your estate.

So, you need to take an extra step when deciding who you want to inherit it. 

An “expression of wish” form is completed through your pension provider, and allows you to name the person or people who you would like to receive your pension funds when you die. The pension’s trustees make the final decision, so providing this guidance can help ensure your wishes are carried out.

Completing the form may not take much time, and it could bring you huge peace of mind to know your remaining pension wealth could be routed to the right place upon your death.

5. Book a pension review with a financial planner

Ultimately, reviewing your pensions alone can be both time-consuming and overwhelming at times. Even after completing the above tasks, you might wish to have an expert cast their eye over your affairs.

So, booking a pension review with us could be next on your pension to-do list. 

We can help you:

• Maximise your contributions tax-efficiently before you retire
• Review your consolidation options and make a confident decision
• Assess how close your pension fund is to meeting your retirement goals
• Draw your funds tax-efficiently when you come to retire.

As you near retirement, these steps could be groundbreaking for both your peace of mind, and for your wealth.

Get in touch

For a review of your pension circumstances, or guidance on any other financial matter, get in touch. Email info@depledgeswm.com or call 0161 8080200.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.