Retirement planning: The ‘really crucial step’ when it comes to maximising your pension – Express

Financial expert gives advice on reducing risk on pensions

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When it comes to planning for the future, pensions can be an important part of the conversation to ensure that a person has enough income to live how they wish during retirement. Financial planning expert Heather Owen from Quilter discussed the importance of setting up a pension an exclusive interview with

She said: “Get that pension set up if you haven’t already. Get a direct debit in place, no matter what it is that you can afford. If it’s £20 a month, do that.

“Just do something, that’s the really important thing.

“Set up a direct debit, get that going into your pension. And then the thing to think about is if it invested correctly.

“For those people who have not engaged closely with their pension, you might not be familiar with the fact that it’s invested, or how that money is invested.

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Retirement planning for the future is important if one wants to retire comfortably (Image: GETTY)

“But at the end of the day, if that money is not invested, then it just sits there as cash, and isn’t growing.”

Investing can be done at any stage leading up to retirement but the risk levels one should take may differ.

During the interview, Ms Owen shared her thoughts on what type of risks could be taken at each different stage.

She said: “The really important thing to do is to ensure its invested and it’s taking the right level of risk, for you and your individual circumstances.


“Somebody who is aged 25, is self-employed and setting up their pension, they have a much greater time horizon.

“That person has maybe forty or fifty years until they come to retire, they can afford to take a lot higher level of risk because they have the time to ride the ups and downs in the market, which they will see many times.”

Essentially what she meant is that the longer people have to save and build, the more investment risk they can potentially afford to take.

However, each person should take a level of risk that is appropriate for them. It’s also crucial to remember that with investing, capital is at risk.


Investing some of your retirement funds can be a great way to maximise your pots (Image: GETTY)

She continued: “On the flip side, if you are somebody that is approaching retirement, you possibly have got three of four years to retire, start thinking about what you may need first of all.

“Firstly, gather all the pension pots you do have, and get a really clear understanding on what your provision is at that point, and what do your pots look like.

“If you’re approaching retirement, maybe you should be taking a lower level of risk potentially, because you don’t have that long to withstand those ups and downs in the market.”

Investing can be a really valuable tool in growing one’s wealth, and potentially get them to a financial level they are happy with.

Some people may not feel comfortable with investing due to the uncertainty that comes with it.

Therefore, it is important to speak to a financial advisor about each different situation.

However, Ms Owen stressed the importance of thinking about the money going into one’s pension.

She concluded: “It’s important to maximise what you put in your pension.

“Maximising what you can put into your pension is a really crucial step to making sure you’re going to be comfortable.

“Future you will thank yourself for it.”