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If you have a decade or more to go before you plan to retire, you probably don’t need to worry too much as markets tend to recover over time. In fact, now could represent an opportunity to pay in more while markets are low.

However, if retirement is only a few years away – or you’ve already retired – any fall in the value of your pension savings could have a bigger impact. If this is you, there are a number of actions you can take now which can help get you back on track.

 

I have less than 10 years until I start accessing my pension savings

Firstly, any fall in the value of your pension savings may not be as great as you expect, as many of our pension investment options move into lower risk investments (or ‘de-risk’ themselves) as you approach retirement – at Standard Life, we call these lifestyle profiles. You can check your current pension value and where you’re invested by logging in to our online service or downloading our app.

If your pension savings have fallen, here are some options which could help you get back on track:

1. Consider increasing how much you pay into your pension. Even at this stage, a small increase in how much you pay into your pension can make a difference to your final pot size, especially if it coincides with markets recovering. If you have a workplace pension, you could also see an increase in employer contributions if they match increases in your payments.

2. Consider transferring other savings into your pension (as counter-intuitive as this may feel right now). They’ll benefit from a tax-relief boost and could help your pension savings’ recovery to accelerate. You can typically save up to £40,000 a year into a pension and may be able to save more than this if you haven’t used up all of your annual allowance from previous years. There are also inheritance tax benefits of transferring other savings into your pension savings.

3. Consider delaying your retirement or when you first start accessing your pension savings. Putting off accessing your pension savings could give them a greater chance to recover. If delaying your retirement, it’s important to update your selected retirement date, especially if your pension savings are invested in one of our lifestyle profiles, which automatically de-risk as you get closer to your retirement date.

It’s important to remember though that with all these options, the value of investments can go down as well as up, and may be worth less than was paid in.

To see what impact these actions could have on your future retirement income, log in to our online service and use our retirement income tool. You can find this under ‘Plan your retirement’. You can also make a new payment to your pension and update your retirement date using our online service or app.

It’s also a good idea to consider getting financial advice, as an adviser can provide you with a tailored plan that meets your individual needs. You can find one yourself at unbiased or you can also get financial advice from Standard Life. There’s likely to be a cost for getting advice.

If you’re over 50, you should consider getting free guidance on your pension options from the government’s PensionWise service.

 

I’ve already retired and I’m taking money from my pension savings

It’s understandable you may be feeling anxious about any fall in the value of your pension savings which you’re currently relying on for an income. How much your savings have fallen by will depend on what you’re invested in and the level of risk you’re taking. You can check the current value of your pension savings and where you’re invested by logging in to our online service or downloading our app.

If your pension savings have fallen, here are some actions you can take which could help them last longer:

1. Consider reducing your income. Taking money from your pension savings when the value is low makes it harder for them to recover later. Could you reduce the income you take from your pension savings until markets pick up?

2. Consider using other savings to supplement your income. If you have other savings (for example ISAs and bank savings), could you use these to supplement your income in the short term so you don’t have to withdraw as much from your pension savings?

3. Consider delaying your retirement. If you’ve only taken your tax-free lump sum and haven’t stopped working yet, could you delay your retirement so you can put off accessing your pension savings to give them a greater chance of recovering?

To see how long your pension savings could last if you were to change how much income you took, log in to our online service and use our review tool, which you can find under ‘Review your plan’. This is available for most of our customers who have started to access their pension savings.

Before making any decisions about your pension savings or other investments, you can get free guidance from the government’s PensionWise service or you may want to consider speaking to a financial adviser. You can find one yourself at unbiased or you can also get financial advice from Standard Life. A financial adviser can work with you to build a tailored plan that’s tax efficient and resilient to ongoing market changes.

There’s likely to be a cost for getting advice.

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