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Six pension mistakes you can't afford to make

Accidentally putting a red sock in the white wash might be very annoying and leave you wearing pink for a week or so, but make a mistake with your pension and you could pay for it for the rest of your life. Here are six tips to help.
For context, I should say right at the outset that expecting your employer’s Workplace Pension Scheme plus your State Pension to be enough is likely to result in disappointment and financial hardship in retirement. Most people will need some form of additional pension to live comfortably when they retire.

1. Putting it off.

You know you should start saving for your future and you fully intend to but just not today. You might want to rethink this because if you put it off, it’s not just what you could have saved that you’ll miss out on. You’ll also be missing out on tax relief you could get on your pension contributions – this tax-relief helps to boost your pension fund.
How your investments perform and importantly, how long you’ve been saving for also help determine how much you have when you retire. So, if you put off saving in a pension, you’ll have to pay a lot more in to make up for lost time and you’ll miss out on the effects of potential compound growth.

2. Compound growth?

It may sound a bit complicated but, put simply, compound growth is the force that can help grow your pension fund. Think of it as growth on the growth that helps savings grow at a faster rate over time than simple growth. It’s another factor that really adds to the cost of delay in preparing for retirement.

3. Not saving enough

According to the Money Advice Service, ‘More than half of people in the UK either aren’t saving at all for their retirement or they aren’t saving nearly enough to give them the standard of living they hope for when they retire.’* But how much is enough? Well, it depends on what you want in retirement and what other savings you have.
Part of my service is helping my clients understand any provision they already have and gaining a picture of what their target is. If there is a shortfall (and there often is!) I can recommend the best way to address it.

4. Thinking your home is your pension

Come retirement, you may find yourself in the lucky position of living in a mortgage-free house that’s too big for you. You might think you will sell up to buy something smaller and use the equity left over to fund your retirement. Choosing to move is one thing – but having to is another. You may be very happy in your home and have become attached to it. If you do decide to sell-up it could take time to find a buyer at the price you need. Then there are the moving and legal costs, not to mention the inevitable stress that goes with moving home.

5. Opting out of your employer’s pension

Did you know if you opt out of your employer’s pension scheme you could also be waving goodbye to potentially thousands of pounds? That’s because when you pay in, your employer will usually pay in too – for as long as you’re still employed there. They may even match your contributions, so the more you pay in, the more they might pay in too – check your Workplace Pension scheme documents to find out what your employer will pay.

6. Not keeping track of your pensions

Do you know how much your pension is worth?  Do you know how many pensions you have or where they are? How about the type of funds they’re invested in or how much risk is involved? If any of these questions strike a chord with you, it’s time to take stock and review your pension(s).
A good rule of thumb is to check your pension savings at least once a year. Find out if your pension provision is on track to give you a retirement you’ll love by arranging a review with me.


I help my clients retire and live happily ever after. If you would like to find out whether you are saving enough for a comfortable retirement Call 01473 730 999 or email Find more details at

The value of your investments can go down as well as up, so you could get back less than you invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
This article is for general information only and not intended to address your particular requirements. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation.
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Lighthouse Platinum Wealth Management

4 Constable Court
The Street
Ipswich IP8 3LY
Tel. 01473 730999

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