With Pension Awareness Week taking place from 15 to 19 September, now is a great time to revisit your pension planning to give yourself the retirement you deserve.
Pensions have never been a hot topic of conversation, and for many people, they are something they intend to ‘sort out later’. But with increased living costs, longer life expectancy and new tax proposals on the horizon, getting your pension reviewed should be high up on your agenda. Pension Awareness Week is a chance to do just that.
Getting to know your pension
Although pensions are key to a secure retirement, people often don’t understand the basics. Recent researchfound one in five people (20%) don’t know what type of pension they have, and more than half (55%) don’t know where their money is invested1.
Many also struggle to keep up with different pension pots. Nearly 70% said they had between one and five pensions. One in five don’t know how many, while more than one-third weren’t sure how to access them. There’s also a lack of awareness around pension tax relief – 57% didn’t know the government tops up pension contributions and just 7% were aware pension tax relief starts at 20%. Encouragingly, a quarter (25%) have increased their contributions, but many others didn’t know they could. The findings make it clear – people need more help to take control of their pension savings.
Will your State Pension be enough? Don’t count on it
Many people still see the State Pension as the central part of their retirement income. But it may not go as far as you hope.
Assuming you qualify for the full new State Pension, you’ll receive just over £230 a week, which is around £12,000 a year. That may cover basic living costs but leaves little room for anything extra – especially if you rent or still have a mortgage. The State Pension should be seen as the foundation – not your full retirement plan.
And that’s assuming you qualify. You’ll need 35 years of National Insurance contributions or credits. It’s easy to check by visiting www.gov.uk/check-state-pension to get your State Pension Forecast, especially if you’ve taken time out of work, had gaps in employment, or lived abroad.
So, how much do you need in retirement?
The Pensions and Lifetime Savings Association (PLSA) has outlined three Retirement Living Standards to help individuals work out their retirement income needs.
A Minimum standard at £13,400 per year for a single person covers basic needs with some social activities; a Moderate standard at £31,700, allows for more financial security and flexibility; while a Comfortable standard at £43,900, affords greater luxuries like extended holidays and regular leisure activities.
The figures are obviously higher for a couple to have the same standards. These figures exclude housing costs, so if you anticipate rent or mortgage payments in retirement, you should plan accordingly.
Pensions and inheritance – new rules, new risks
Along with paying for retirement, pensions have long been a popular estate planning tool. Because most defined contribution pensions fall outside your estate for Inheritance Tax (IHT) purposes, they’ve been a way to pass on wealth tax-efficiently. But that is set to change, as the government plans to bring unused pensions into scope for IHT from April 2027. This could significantly affect those planning to leave their pension untouched and passed on to the next generation. It’s a reminder that pension rules can and do change and what worked five years ago might not be the best approach in future.
Time for a pension review? Taking the first step
So, why not use Pension Awareness Week to ask yourself some honest questions.
Do you know how much you’ve saved and whether it’s enough?
Do you know how many pensions you own?
Do you know how your money is being invested?
Are you taking advantage of tax relief on pension contributions?
What income do you want in retirement – and are you still on course to achieve it?
You don’t need to know all the answers before speaking to someone – you just need to be willing to start the conversation.
A financial adviser can help you understand your current situation, work out whether you’re saving enough, and decide when and how to access your funds. They can explain options for consolidating old pensions, making the most of tax relief, or adjusting your investments to match your time horizon and risk appetite. They can also help with more complex questions, like when to start drawing from your pension, how to balance income needs with tax efficiency and what to consider if you want to leave money to loved ones. Whether you’re decades away from retirement or already thinking about when to stop working, now’s your chance to find out whether your pension is still on track. The actions you take now could make a huge difference.
At S4 Financial, we are here to help and can support your retirement planning. To get in touch with us just email hello@s4financial.co.uk, or call us on 01276 34932.
1 Aviva, 2025 2 PLSA, 2025
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.