10:26 pm - February 4, 2026
As 2026 begins, financial experts are urging savers to focus on retirement planning by taking simple, actionable steps throughout the year. According to guidance from financial services providers, checking pension savings and making strategic adjustments can significantly improve long-term retirement outcomes. These straightforward resolutions can help individuals avoid common pitfalls and ensure they are adequately prepared for their future.
The emphasis on retirement planning comes as recent data reveals that less than half of households are currently on track for an adequate retirement income. Even higher earners face risks of undersaving and potentially being unable to maintain their lifestyle in retirement, making periodic reviews of pension savings increasingly important.
Understanding Your Retirement Planning Position
One of the fundamental steps in effective retirement planning is determining whether current savings levels are sufficient. Financial advisors note that many people either overestimate their pension savings or worry unnecessarily about non-existent gaps. According to the HL Savings and Resilience Barometer, only 43% of households are currently positioned to achieve adequate retirement income.
Using online pension calculators can provide clarity on whether savings are on track. These tools allow individuals to model different scenarios and identify potential shortfalls while there is still time to make adjustments.
Increasing Pension Contributions
Financial professionals recommend examining whether current contribution levels, particularly those set at auto-enrolment minimums, will be sufficient for desired retirement lifestyles. For those unable to increase contributions immediately due to budget constraints, a strategy of boosting pension payments with each pay increase or job change can prove effective over time.
Additionally, checking whether employers offer contribution matching can unlock substantial additional savings. Many workplace pension schemes will increase their contributions when employees increase theirs, effectively providing free money toward retirement.
Maximizing Tax Relief Benefits
Higher and additional rate taxpayers may not be receiving all the tax relief they are entitled to on pension contributions. Those paying into relief at source pension arrangements, including many Self-Invested Personal Pensions and some workplace schemes, receive only basic rate relief automatically and must reclaim the remainder through self-assessment.
However, pensions set up as net pay or salary sacrifice arrangements automatically claim tax relief at the marginal rate of income tax, requiring no additional action from savers. According to pension guidance, individuals can backdate claims for unclaimed tax relief for up to four tax years, provided they maintain records of their contributions.
Locating Lost Pensions
Individuals who have changed jobs multiple times may have lost track of previous workplace pensions, potentially leaving thousands of pounds unaccounted for in their retirement planning. The government’s Pension Tracing Service can help locate lost pensions using either employer names or pension provider details, though it cannot confirm whether a pension actually exists.
Meanwhile, consolidating multiple pensions into a single arrangement can simplify management and potentially reduce costs and administrative burden. Financial advisors emphasize that consolidation can improve decision-making by providing a comprehensive view of total retirement savings.
Consolidation Considerations
Before consolidating pensions, experts warn that savers must carefully evaluate potential drawbacks. Exit penalties, loss of valuable features such as guaranteed annuity rates, and the almost universal inadvisability of transferring out of defined benefit schemes are critical factors to consider.
In contrast to quick consolidation decisions, taking time to assess each pension’s specific features and costs can prevent costly mistakes. Professional financial advice is recommended when uncertain about whether consolidation is appropriate for individual circumstances.
Financial advisors note that pension and tax rules are subject to change, and the availability of pension funds from age 55, rising to 57 in 2028, should factor into planning decisions. Individuals uncertain about specific actions should seek personalized financial advice before making changes to their retirement arrangements.
