Pension Performance Checklist: Is Your Pension Working Hard Enough?

Ensuring your pension is performing optimally is crucial for securing your financial future. Evaluating your pension performance involves assessing various factors such as growth rates, fees, risk levels, and the effectiveness of your current pension provider.

This comprehensive guide will help you evaluate your pension performance, identify areas for improvement, and understand how this assessment can meet your essential financial needs during retirement.

What is pension performance?

Pension performance is a measure of how well your pension investments are growing to meet your retirement goals.

Evaluating your pension involves looking at several factors, including growth rates, fees, risk levels, and the effectiveness of your current pension provider.

The significance of a well-performing pension

A well-performing pension plan ensures that you will have enough resources to maintain your desired lifestyle in retirement.

With the increasing cost of living and the uncertainty surrounding state pensions, personal pensions play a critical role in financial stability during retirement.

Ensuring your pension is performing well can help alleviate worries about meeting your financial requirements and economic uncertainties when you get to retirement.

How to determine if your pension is performing optimally

Follow this comprehensive pension performance checklist to ensure your pension performs optimally for you:

1. Reviewing your annual pension statement

To determine if your pension is performing optimally, start by reviewing your annual pension statement.

Compare the growth rate of your pension against benchmarks and ensure your contributions align with your retirement goals. Check if the projected retirement income meets your expectations.

2. The importance of assessing fees

Assessing fees is crucial as high fees can potentially erode your pension value over time. Compare management fees and transaction costs with other providers to ensure you are getting the best value.

3. Evaluating investment performance

Evaluate the performance of your investments by examining your asset and fund allocation. Ensure your investments are diversified to balance risk and return.

Compare the performance of your investments against relevant benchmarks to determine if they are meeting expectations.

4. Matching investments to your risk tolerance

Consider your risk tolerance and match your pension investments accordingly.

As you approach retirement, shifting to lower-risk investments may be prudent, to potentially lock in any growth you may have benefitted from.

5. Assessing pension provider efficiency

Research the efficiency of your pension provider. Look into their reputation and stability, and assess the quality of their customer service.

Good customer service is crucial for addressing concerns and helping to manage withdrawals from your pension when you retire.

6. Consider pension consolidation

If you have multiple pension pots, consider consolidating them for easier management and potentially lower fees.

Ensure you understand the terms and potential costs involved in pension consolidation, and that you’re comfortable with the provider you have consolidated all your pensions into.

7. Seeking professional pension advice

We’d always recommend seeking professional pension advice from an FCA-regulated pension adviser (like the team at Hilltop) to get personalised advice and ensure your pension strategy is on track.

8. Regular monitoring of pension performance

Monitor your pension performance regularly by conducting in-depth pension reviews at least once a year. Keep an eye on market conditions and adjust your strategy accordingly.

The benefits of conducting a thorough pension performance review

Conducting a thorough assessment of your pension performance has several benefits.

It helps to identify if you are on track to meet your retirement goals or gives you a notification that you may need to adjust your investments to meet your needs.

Regular reviews could alleviate worries about the future, providing a sense of security and confidence.

Ensuring financial security with a well-performing pension

A well-performing pension is essential for meeting your financial needs in retirement.

By following this comprehensive checklist, you can work towards ensuring your pension is working hard enough to secure your future.

Regular reviews, informed adjustments, and professional advice are key to maintaining and improving your pension performance, helping to provide financial security and peace of mind.

What can Hilltop do for you?

Our team of pension advisers are here to help you make the most out of your pension.

Whether you’re consolidating, switching, or looking to ensure your fees are in line with industry charges, we offer personalised solutions to help you achieve your financial goals.

For personal pension advice, contact us on 0161 413 7051 or request a callback and our experts will be in touch as soon as possible.

Poppy Kelly

Date posted: June 2, 2024

Last updated: February 20, 2025