How to review your pensions

Esther Shaw / 16 November 2015

Are your pension savings and investments performing well? Read our guide to get your finances on track for a secure retirement.



When your pension statement lands on the doormat, it can be all too tempting just to file this away without reading the contents properly.

But for many people, their pension is likely to be their biggest asset after their family home, so it’s important to pay some attention to this paperwork.

You need to monitor your retirement savings on a regular basis to ensure you are still on track to meet your savings goals.

Spending just a few hours doing this now could leave you thousands of pounds better off in your later years.

But before even opening your annual statement, you should first spend some time working out your own goals for retirement. This will help you work out whether or not you are on target.

How much money will you need in retirement?

Read pension statements carefully

Your pension statements are important documents which provide key information – such as how well or badly you are doing, and which funds you own.

They are a way of helping you work out whether your pension is on track to give you a comfortable retirement – and a reminder to take action if there is a significant shortfall.

With some pensions, you will receive an annual statement showing much money is in your pot, along with a projection of what it will be worth in retirement.

With others, you may not get a yearly update, but you can still request a statement showing how much you are likely to receive once you stop working.

Find out how to make the most of your pension here.

Scrutinise this paperwork

Once you have your pension statements in front of you, you should scrutinise each of these documents carefully and check what the pension invests in, and its performance. This will help you understand the asset allocation and risk allocation of your retirement funds.

As well as pension statements, many pensions firms now have investor-friendly websites which allow you to monitor how your funds are doing.

Do you know where all your pensions are? Use our guide to tracing old pensions.

Check how well your chosen investments are performing

When it comes to reviewing your pensions, you should look at how all of your individual funds are doing; this applies even if you are only invested in your provider’s default fund.

You should compare your funds against their benchmark, and also other funds in the sector.

Ask yourself whether your fund is outperforming its peers, keeping pace with them, or lagging behind.

What if your pension is not performing well?

If your pension is under-performing, this could have a significant impact on your future retirement.

That said, you should not jump to any conclusions; the key is to establish why your money has fallen.

You need to work out whether this is down to the fund, or whether, for example, the asset class is out of favour.

If the asset class is underperforming, it’s important not to sell out at the bottom; as an investor, you need to be patient, as asset classes can recover.

Equally, if it is the fund which is the problem – rather than the sector or asset class – you should also remain patient and give the fund manager time to prove their worth. If you jump ship at the first wobble, you could end up suffering the full extent of the downfall, but then miss out on any recovery.

That said, if poor performance is consistent, it can make financial sense to look into switching to a better-performing rival.

Read our guide to switching pensions.

How often should you review your pension?

It’s important not to fall into the trap of obsessing over how your funds are performing, as if you try and make changes in response to minor wobbles in the market, your fund will almost inevitably suffer.

Generally speaking, it is worth checking how your funds are performing once a year, unless you are approaching retirement, when you may want to increase this to twice a year.

At the same time, don’t forget to request a state pension statement too, so you can see how much state pension you’ve built up so far. You can apply for one online or by phone or post.

Will you lose out when the new state pension is introduced?

Check the value

As well as checking the performance of your pension when you review it, you should also check the total valuation.

There are a host of online tools you can use to see if your savings are on track to reach their target.

If your fund is off target, you should look closely at what you are invested in, and your asset allocation.

Ideally, your pension portfolio will be diverse, and will consist of funds covering several asset classes, sectors and regions. If this is not the case, you should look at whether it makes sense to make changes.

If in doubt, you should seek professional advice.

In addition, you should check that you are paying enough into your pension.

Six reasons to switch your pension today.

Trace old pensions

With many people now changing job several times during their career, it can be easy to lose track of pensions.

If this has happened to you, it’s worth seeking free help through the Government’s Pension Tracing Service. This service can help you find both company and personal pensions.

Note however, that some scams have cropped up offering to “help” you find lost pensions – but for a fee.

Take care if you search online for the Pension Tracing Service as many companies going by similar names will pop up in the results, and could be costly to use – or fraudulent. The key is to remain vigilant.

Saga Investment Services specialises in helping you make the most of your pension. So whether you’re looking to switch providers or simply want to see how your pension stacks up, they have everything you need right here

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.