It’s easy to neglect your retirement savings. Even if you intend to get a handle on your pension, life often gets in the way. As a result, you may have left your workplace pension to run in the background for quite some time.

The good news is that your pot should be quietly growing month by month through a combination of your own contributions, your employer’s contributions, and investment returns on the funds.

But that doesn’t necessarily mean you can sit back and hope to enjoy your dream retirement when the time comes.

Preparing for your ideal retirement requires planning. You need to understand where you are, where you’re headed, and how you’re going to get there.

To take control of your retirement savings, read on to discover five key things you should know about your workplace pension.

1. How much you currently have saved

First things first: it’s helpful to understand where you currently stand.

For some people, this could be as straightforward as checking their latest pension statement. However, many people will have accrued multiple workplace pensions throughout their careers.

In some cases, it might be worth consolidating multiple pension pots into a single scheme. Not only can this make it easier to track and manage your retirement savings, but it could also help boost your pot further by reducing your admin fees.

However, there are many pros and cons to consider with consolidation, so it is important to seek professional advice if you are considering combining pensions.

Often, workplace pensions offer a more cost-effective means of saving for retirement than private pensions.

Once you have tracked down all your pension pots, you can add their values together to calculate your total savings. Remember to factor in any alternative sources of retirement income, such as State Pension payments, non-pension savings and investments, and property income.

2. How much you and your employer are contributing

To calculate how much your pot could grow by retirement, it’s useful to know how much you and your employer are paying into your pension.

You can typically see how much you have both contributed on your regular payslip or on your Zurich client portal. Otherwise, your HR department should be able to tell you how much you are currently contributing.

Some employers will match your contributions up to a certain level.

Additionally, you may receive Income Tax relief on your contributions.

3. What level of growth your funds are achieving

Payments into your pension aren’t the only way your pot grows. Even once you have stopped contributing to a pension scheme, you might notice the value typically rises over time.

Generally, funds held in a pension are invested in a diverse portfolio and grow through long-term returns. These returns are reinvested to deliver growth-on-growth, known as compound returns. However, the value of your fund can go down, as well as up.

Investments often deliver the strongest results when held for a long time. As a result, the earlier you pay into your pension, the more chance it will have to grow.

By understanding your fund’s growth rate, as well as the size of your current pot and regular contributions, you can project the value of your savings at retirement. In some cases, you may be able to adjust your investment portfolio to increase your returns and further boost your pot.

4. How much you could need to save by retirement

To help ensure your retirement savings are on track, it’s often worth calculating roughly how much you expect to spend in retirement.

Of course, retirement doesn’t come with a fixed price. Your expenses will depend on the lifestyle you’re hoping for when you finish work. As such, it will help to define what you want your retirement to look like.

Some questions you might ask yourself include:

• Will I stay in my current home, downsize, or move?
• What are my plans for travel and holidays?
• Do I hope to take up any new hobbies, or spend more time enjoying existing ones?
• How much do I expect to spend on clothing, entertainment, gifts, and luxuries?

It’s also important to consider everyday expenses such as utilities, groceries, vehicle costs, subscriptions, and insurance premiums.

However, it may not be enough to just calculate how much your ideal retirement would cost in 2026. Most likely, inflation will continue pushing prices higher both before and during your retirement. As a result, it’s important to estimate how much prices could rise to give a more accurate forecast of your expenses.

Forecasting the cost of your retirement can be complex. But having a general idea of how much you might need to save throughout the rest of your career means you can see if you're likely to meet your retirement savings goals.

5. What steps you can take to ensure your savings are on track

If you find that your pension savings are falling short of your retirement goals, don’t panic.

Thankfully, there are several steps you can take to help get your savings on track, such as increasing your monthly contributions and revising your retirement goals to reduce your expenses.

You might also consider adjusting your pension’s investment portfolio. The longer your time horizon to retirement, the more equity exposure your pension can typically afford, as equities offer higher long-term growth potential.

However, it is important to consider the risk associated with allocating more of your pension funds to equity.

It can often be beneficial to adjust your investment strategy in the seven years pre- and post-retirement to mitigate your portfolio’s risk profile while allowing your funds to continue growing.

Crucially, the sooner you act, the better. By taking control of your pension early, you allow more time for your pot to grow, which could have a significant impact on your lifestyle in retirement.

Take control of your retirement planning

Ensuring your workplace pension is on track to achieve your retirement goals can be complex. But by taking action early, you can help build the savings you’ll need to enjoy your ideal retirement lifestyle when the time comes.

For more information, you can email enquiries@rfsl.co.uk or call 01534 502000 in Jersey or 01481 747940 in Guernsey.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of tax legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 50. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Rossborough Financial Services Limited is regulated by the Jersey Financial Services Commission under the Financial Services (Jersey) Law 1998 and licensed by the Guernsey Financial Services Commission.