How does Rest Less make money
We make money through advertising and commission from affiliate links, which enable us to offer Rest Less as a free service to our users. The content on this page may use affiliate links, which track traffic from our website to a third party provider and enable us to receive a commission or payment from any traffic we refer.
* Affiliate links on this page have an * next to them. We place enormous importance on our editorial independence and the integrity of our content which means that we will never change how we write about something as a result of an affiliate link.
Most of us know how important it is to save for retirement, yet even if we’ve diligently paid into a pension for many years, we often don’t know how much we’ve actually got.
One in four of us has no idea what the current value of their pension is according to research from Moneybox, while only one in 10 know what their retirement savings are invested in.
Brian Byrnes, Director of Personal Finance at Moneybox, comments: “Understanding pensions doesn’t have to be like relearning algebra. Small steps can help you become much more confident in understanding, assessing and taking action that can help unlock a retirement full of possibilities.”
Here, we explain how to check how much you’ve got, what your pension is invested in, how much you’re paying in fees and, most importantly, whether your retirement savings are on track to provide the retirement you want.
Advertisement
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide Chartered independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial adviser. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 2,600 reviews on VouchedFor, the review site for financial advisers.
Checking what you’ve got
You should receive an annual pension statement from your pension provider telling you the current value of your retirement savings. This should also tell you how much annual income you might expect to receive at retirement, as well as where your money is invested.
If you’ve worked for a number of employers over the years, and signed up to their workplace schemes each time, check you’ve locates all your various pension pots.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown said: “Go through your paperwork to make sure you have information for all your pensions, and if you think you’ve lost one, then a call to the Government’s Pension Tracing Helpline can help you find it. All you need is either the name of your employer or the pension provider. They can’t tell you if you have a pension with them, but they can give you contact details – you could find a pension worth thousands of pounds.
“Once you’ve tracked down all your pensions then it might make sense to consolidate them. Having one overarching view will give you a better sense of what you have, and save you time, admin and potentially money. Just make sure that you aren’t incurring exit fees or missing out on valuable benefits such as guaranteed annuity rates by consolidating before you do so. It also rarely makes sense to transfer a final salary pension.”
Is your pension working hard enough?
Knowing the current value of your retirement savings is the first step towards ensuring you’re on track for retirement. The second step is to check where your contributions are going.
If you didn’t make an active choice when you first joined the scheme, your contributions will normally be put into a default fund. This is often designed as a suitable option for the typical employee and, using a process known as pension lifestyling, may automatically adjust the investments into lower risk options such as bonds and cash as you approach retirement.
However, the default fund may not be the right option for everyone and your age, proximity to retirement, financial confidence, and appetite for risk will all influence where your pension savings should be invested.
Camilla Esmund, Head of Investor Campaigns at interactive investor, said: “See where your pension is invested, look at performance, and check that your investments are pulling their weight and whether they align with your goals and timeframe. If anything is unclear and you’re still unsure, ask the provider.”
Find out more in our guide Where is my pension invested?
How much are you paying in fees?
It’s also worth checking how much you’re paying to have your pension invested. Charges can vary between providers and funds, and while a difference of a few tenths of a percentage point might not sound like much, it can add up over many years.
Your pension may have several different types of charges, including an annual management or fund charge, administration fees and, in some cases, adviser or platform fees. Check your pension statement or online account to see what you’re paying. Your provider should also give you information showing the effect charges could have on your pension.
For example, if you have £50,000 in your pension and it grows by an average of 5% a year and you pay total charges of 0.5% a year, your pension could grow to around £97,000 over 15 years, assuming no further contributions. If your total charges are 1.5% a year however, it could grow to around £84,000, a difference of almost £13,000.
Of course, investment returns aren’t guaranteed and your pension is unlikely to grow at exactly the same rate every year. The example is simply intended to show how charges can compound over time.
This doesn’t mean you should automatically choose the pension with the lowest fees. A more expensive fund or pension may offer features or investment options that could be valuable to you. But it’s important to understand what you’re paying and consider whether you’re getting good value for money. Learn more in our article What pension charges am I paying?
Are you on track for the retirement you want?
Knowing how much you have saved into your pension is useful, but the most important question you’ll need answering is whether your retirement savings are likely to provide the income you want.
A good starting point is to think about how much money you’d like to have coming in each year once you stop work, and then consider what income you can expect from the State Pension and other sources.
For example, let’s suppose you’re 55 and have a pension worth £200,000. You’re hoping to retire at 67 and would like a total income of £30,000 a year in retirement.
If you’re entitled to the full new State Pension, this could provide around £12,500 a year in today’s terms, leaving around £17,500 a year to come from your private pension and any other savings or investments.
Whether £200,000 is enough will depend on a range of factors, including how your pension is invested, how much you continue to contribute, when you retire and how long your money needs to last, but the earlier you check, the more options you have if there’s a shortfall. Find out more in our article Can you afford to retire?
If you need help working out how long your pension pot might last and what sort of income it could provide you with, it’s a good idea to make the most of the online calculators that are available.
These can provide estimates of how much you could stand to withdraw per year via pension drawdown compared to how much you could receive yearly by using your pension to buy an annuity instead. Learn more about annuities in our article Annuities explained and abut drawdown in our guide What is pension drawdown and how does it work?
Could you top up your pension?
If you’ve discovered that your pension isn’t worth nearly as much as you thought it was, you may be looking at ways you can pay in a bit more.
Robert Cochran, Pensions Expert at Scottish Widows, said: “A pay rise, bonus or reduction in another expense can create an opportunity to add a little more. If your employer offers contribution matching above the standard level, check whether you are making full use of it.”
For example, someone aged 55 with £200,000 in their pension who continues contributing £500 a month until age 65 could build a significantly larger pot than someone who stops contributing now, particularly if their investments grow over time. Assuming their investments grow by an average of 5% a year, after charges their pension could be worth around £401,000 by age 65, compared with around £326,000 if they made no further contributions. The additional £500 a month could therefore potentially add around £75,000 to their pension pot over the decade, which includes £15,000 in investment growth.
Of course, investment returns aren’t guaranteed, and the value of a pension can rise and fall. This example is for illustration only and doesn’t take account of inflation or changes to charges.
Even if you’re not currently working, you or a partner can still contribute to a pension if it’s affordable to do so. You can read more about this in our article Can my husband or wife pay into my pension?
Maike Currie, VP Personal Finance at Pension Bee explained: “Even with little or no relevant UK earnings, you can generally receive tax relief on pension contributions of up to £3,600 gross a year, provided you’re eligible. In a relief-at-source pension, that would typically mean paying £2,880 yourself, with £720 in basic-rate tax relief added. Even small contributions can help keep your retirement savings on track.”
Learn more in our guide 11 simple ways to top up your pension in 2026.
A final thought…
Don’t panic if after checking your pension you find out you’re not where you hoped to be.
Discovering a shortfall doesn’t mean you can’t achieve the retirement you want. The earlier you identify it, the more options you have, whether that’s increasing contributions, working for longer, adjusting your retirement income target or making better use of other savings and investments
Advertisement
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide Chartered independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial adviser. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 2,600 reviews on VouchedFor, the review site for financial advisers.
Rest Less Money is on Instagram. Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.
Join the discussion
Read our full commenting terms and guidelines