Make 2021 the year you get to grips with your pension

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MoneyPlus Features Team

January 05, 2021

5 mins read

If getting on top of your finances is top of your list of New Year’s resolutions try our five-step guide to getting to grips with your pension plans.

Farewell to 2020, you won’t be missed by many. And while it’s clear there are still some tough times to get through, there is also hope that 2021 can be better and we can eventually start to think about brighter days ahead. And what better way to do that than with some New Year’s resolutions? 

After the temptation to splash the cash over the festive season, it’s not surprising that one of the most popular resolutions people make come January is to improve their finances.  

One of the best ways to do that is to concentrate on something that could make a huge difference to your savings over the long term – your pension.

Not everyone wants to think too hard about pensions. But what if you started to think about your pension not just as funding your old age, but also as potentially giving you more years without work – or more years with more options? 

With that in mind, here’s our five-step guide to getting to grips with not just your pension but also your future.

1. Find out where you are right now

Many of us aren’t entirely sure how much we already have saved up in our pension plan. We might glance at our annual statement, but we don’t pay close attention. 

But it’s important to know how much you’ve got so far because it can highlight if there’s a shortfall between what you’ll have and what you’ll need.

Don’t forget to include any pensions you might have with previous employers or that you’ve set up yourself. If you think you might have ‘lost’ some pensions along the way, the Government’s pension tracker website can help. 

You can find out how much you have in your Standard Life pension plan by logging in or by checking the app.

If you feed all this information into our pension calculator, you’ll start to get an idea of how much could be available to fund life after work.

2. Consider a top-up

If your future pension income isn’t looking quite as you’d hoped, now could be a great time to take stock and think about how you could boost the money you pay in. 

Could you pay in more every month? Have you cut costs, made any kind of savings or had a bonus that you could tuck away into your pension? 

The current tax year ends in April, and most people are allowed to pay in their annual earnings, capped at £40,000, every year before facing a tax charge. So is there any money you could put away before the tax year ends? 

Remember that a pension is an investment and its value can go down as well as up and may be worth less than what was paid in. Also, tax and legislation may change and your own individual circumstances, including where you live in the UK, will have an impact on your tax treatment.

3. Adjust for any changes

If it’s been a while since you last gave careful thought to your pension plan, a lot has probably changed. 

You’re most likely a few years closer to retirement now – you might even be thinking about accessing some money from your pension plan soon. It’s worth knowing that you don’t usually have to wait to state pension age (currently 66) to take money out of your workplace or private pensions. Usually, you can start taking your pension money at age 55 (although this is due to rise to 57 from 2028). If you do access your pension benefits, it could limit what you could save into a pension in the future. Visit the MoneyHelper website for more information.

It’s also possible that the investment choices you made years ago when you set up your plan aren’t as suitable for you now as they were then. So it’s important that you regularly review your pension investments to make sure they’re still right for you and your goals.

We’ve put together a useful article on what to think about when choosing and reviewing your pension investments which can help.

4. Doing the right thing

Was one of your New Year’s resolutions to start living a more sustainable life? Along with recycling, driving less and shopping conscientiously, you may not have realised that your pension can also make a difference.

Where your money is invested matters. Your savings could be supporting companies that are improving the world rather than damaging it. 

At Standard Life we’re committed to making more responsible investment options available so that there are options that can help align your pension investments with your values.

5. Line up your goals

One positive to come from the year of Covid is that with nowhere to go out or on holiday, and often no commute, many people have been able to cut down on their spending. 

If you’d like to carry on saving in the New Year, there’s great savings guidance all over the internet. We suggest making some savings goals: list what you’d like to save every month, every year and into your pension. And give yourself a little reward whenever you hit your targets. 

Our top tip is to look carefully at your monthly costs. Could you change suppliers and get better deals on your phone, gas or electricity, for example? Then what about cutting down on those more obvious ‘luxuries’: the takeaway dinners, unused gym subs, new clothes or even the car upgrade? 

Everyone’s circumstances are different and now may not be the right moment for all. But if you are able to put more aside, if you divert your saved money into your pension before it hits your bank account, you might not even notice that it’s missing. With some pension plans you may even find that if you pay in more, your employer will pay in more too – check what your plan offers.

And if you’re getting a pay rise or bonus at the start of the year, can you consider putting some of that into your pension too? You may not notice the difference now – but ‘future you’ will. 

The information here is based on our understanding in January 2021. 

A pension is an investment and its value can go down as well as up and may be worth less than what was paid in.



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