I started paying into a pension in my 20s when I worked for a phone company. I left after about a decade to join the civil service and am a member of its pension scheme, which I understand is generous.

However, when I was younger I just paid in the minimum as I was prioritising other things like paying the mortgage, house maintenance, cars and the kids. Pensions were a bit of a blind spot to be honest!

I’d like to know how to find my pensions, and how to bring them all together. I would also like to work out when I can retire and what I will need to have.

Ryan

Tom Selby AJ Bell Senior Analyst says:

You’re being far too hard on yourself Ryan! Lots of people will have failed to save anything at all in a pension in their 20s (particularly before auto-enrolment was introduced), so the fact you did something – even if your contributions were relatively small – is a great starting point.

Furthermore, the Civil Service Pension Scheme you are now a member of will provide a very generous ‘defined benefit’ pension based on the number of years you are employed there and your average salary during that period.

Bringing your old pensions together is a sensible idea, partly because it may allow you to lower charges and partly because it will be easier for you to manage.

To help with a search for old pensions you can go here assuming you have the name of your provider or employer.

Assuming these are ‘defined contribution’ pensions – where you build up a pot of money which you can access from age 55 – combining them with a single provider should be straightforward.

You’ll just need to choose a provider you want to consolidate your pensions with and get the details of the pension you want to transfer over. Once you’ve provided the relevant details to your new provider they should do all the legwork for you.

Before transferring any old pensions you should check there aren’t any valuable benefits attached which you may lose, or exit charges that will be applied. Your provider should be able to tell you if this is the case.

How much should you be saving?

A very rough rule of thumb for people saving in a defined contribution pension is to aim to contribute around half the age you started saving as a percentage of your total salary each year.

If this sounds unmanageable, don’t worry – any money saved in a pension will be a sound investment in your financial future.

Because your current employer operates a defined benefit scheme you will simply need to contribute a set percentage of your salary in order to build up or ‘accrue’ pension benefits in the scheme. Your employer will be able to tell you how much you need to pay in and what you will accrue.

For example, take someone who accrues a 60th of their average salary for every year they are a member of the scheme.

If they are a member for 30 years and had an average salary of £30,000, this would provide a guaranteed, inflation-protected income worth £15,000 a year from their scheme’s ‘normal pension age’. This would be in addition to the state pension, which currently pays just over £9,000 a year.

DO YOU HAVE A QUESTION ON RETIREMENT ISSUES?

Send an email to editorial@sharesmagazine.co.uk with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide information and we do not provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

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