As the year draws to a close, it's a good time to do a pensions "health check" to make sure you're on track.
Don't overlook state pensions as you review your retirement planning. You can now get a forecast of your probable state pension online.
If you're not on target to receive the full amount, typically because you haven't paid enough National Insurance contributions, it's worth considering making additional payments.
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Step two is to make sure you have details of all the private pensions through which you may have entitlements, including both occupational schemes from all your employers, and any plans you have started individually. Savers have lost touch with as much as £20bn of pensions cash, the Association of British Insurers warned last month.
This typically happens after people have moved and forgotten about old schemes, so it's worth making the effort to ensure you're not missing out. The Pensions Tracing Service can help you start to track down this money.
With a clear picture of all the pension planning you've done so far, you'll have a better idea about whether you're on track and what you can do to improve your position.
Steps you can take
Increasing pension contributions by even small sums can make a significant difference over time. A 45-year-old with a £100,000 pension fund today earning annual returns averaging 4.5% and paying charges of 0.75% a year could expect to have a fund worth £225,000 at age 65, assuming monthly contributions of £50. Raising the monthly payment to £75 would put the saver on target for a fund of £234,000: an additional £9,000 for a £3,000 increase in contributions over 20 years.
Two other potential sources of additional money are also important: lower charges or improved investment performance will both generate more retirement income.
With each of your private pensions, review charging and performance regularly to make sure you're getting the best deal. Consider consolidating your savings in a single plan that offers competitive terms.
These sound like relatively simple steps, but they're vital elements of sensible financial planning. By reviewing your pensions regularly with the help of an independent financial adviser if necessary you'll substantially improve your chances of securing the best-possible retirement income.
Asset managers weigh in on pensions
Companies that reward senior executives with large pension payments could find themselves at the centre of investor revolts following new guidelines issued to institutional investors.
The Investment Association, whose members comprise British asset management firms overseeing more than £7 trn, has changed its code on executive pay.
From now on it will target companies that pay pension contributions to directors at a higher percentage rate than their staff receive.
The move follows mounting concern that some companies are trying to circumvent controversy over fat-cat pay packages by offering enhanced pensions instead. The Investment Association has now changed its "Principles of Remuneration" to reflect such anxiety.
It has come up with a new rule saying directors should receive pension contributions at the same rates given to the majority of the workforce.
The changes could prompt more asset managers to vote against directors' pay packages at the annual general meetings of the companies in which they hold shares.
Such votes are typically advisory, though companies are now required to hold a binding vote on their forward-looking remuneration policies every three years.
