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When you’re saving for your retirement, it’s important to make your money work as hard as possible for you.

This way, you’re more likely to be able to enjoy the kind of lifestyle you want and deserve in later life.

That’s why careful pension planning is so crucial, and why you should take care not to make small mistakes that can have a big impact on your future.

What are the most common pension mistakes?

Not saving enough

More than one in five people in the UK don’t have a pension of their own, apart from the basic state pension, according to figures from, and many of these are aged over 55. That means they simply won’t have enough money to live off or generate an income when they choose to retire.

Waiting too late to start saving

The earlier you start saving, the more time you have to build up a healthy pension pot. So conversely, if you start late, you’ll miss out on compound growth and reduce your pension’s growth potential considerably.

Not keeping an eye on your pension pot

It’s easy to ignore financial documents, such as pension statements, but it’s important to keep track of what’s going on with your money. Not only does it make sure you know how your pension is invested, it also means you can make changes where necessary, such as increasing the amount you save if you’re in a position to do so.

Putting all your eggs in one basket

Many people rely on a single source of income to fund their retirement, such as an inheritance or the value of their property. However, you can’t be 100 per cent sure that you’ll ever receive the amount you expect to, or get it when you want it, so it’s really important to have your own separate pension arrangements in place.

Depending on the state pension for income

The full new State Pension is £185.15 per week, which works out to less than £10,000 a year. Is that enough to live off in retirement, and enjoy the hobbies and pastimes you choose to fill your time?

Of course not, so you need to have plans in place to supplement this source of income, so you can enjoy a much more comfortable and fulfilling lifestyle in later life.

Not joining a workplace pension

Although many people are automatically enrolled into a workplace pension, you are allowed to opt out. But if you decide to do this, it’s important to remember that you’re effectively turning down free money into your pension, in the form of employer contributions, because if you qualify to be auto enrolled, your employer pays into your pension too.

Losing track of old pensions

According to the Pensions Policy Institute (PPI), nearly three million pension pots aren’t currently matched with their owner – an increase of 75 per cent in the last four years. These are worth an average of £9,470, and worth a staggering £26.6 billion in total.

So if you’ve changed jobs or moved homes since you started working, it’s worth making sure you have details of all the various pension schemes you might have picked up along the way and that each provider has your current contact details.

You might also want to explore the option of combining old pension pots into your Creative Pension Trust account, which is easy to do using the Creative Pension Trust Member Portal. Click here for more information.

Not getting income projections

It’s important to have an idea of what your pension will be worth by the time you choose to retire. Again, the Creative Pension Trust Member Portal can help you with this, allowing you to project your income in retirement and make forecasts based on your planned retirement age, taking into account your pension with us, any other pensions you have, and your state pension.

Assuming all pension plans are the same

It’s easy to assume one pension scheme is much the same as another. But that’s not always true. For example, many older pensions will have high charges attached to them, whereas others could offer better value. So it’s well worth looking at the details of each scheme you have to make sure you’re getting the most bang for your buck.

Not using your tax allowances

You can take advantage of various tax allowances to support your retirement savings. For example, you can save between £4,000 to £40,000 tax-free into your pension every year, depending on the amount you earn.

Look into the tax allowances you’re eligible for, so you can put even more into your pension pot to support your retirement.

Using your pension as an emergency fund

It can be tempting to dip into your pension if a sudden and unexpected emergency arises, although you can only do this from age 55 and above.

However, this will reduce the amount you have to live off in later life, you could end up paying more in income tax and you might lose some of your tax-free allowance.

You should instead set up a completely separate fund, so you’re prepared for any such contingencies.

Getting to grips with the details of your pension savings is the key to making the most of your pension and using it to support the future lifestyle you want/deserve to enjoy.

Tools such as the Retirement Modeller can help you put together a retirement plan – it’s one of many useful tools that you can find on the Creative Pension Trust Member Portal, where you can bring key information together to make the right decisions for your future.

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