Six common mistakes when planning for retirement

With the financial struggles facing the world today, many of us overlook planning for retirement, but getting a pension in place sooner rather than later could prove worthwhile in the long term. Here are six mistakes that are commonly made when it comes to planning for retirement.

1. Assuming there’s plenty of time

When you’re young, it’s easy to assume you’ve got plenty of time to worry about saving for a pension, but research has proven that the sooner you start saving, the more money you’ll build up. The longer you wait, the more money you’ll need to put in to make a difference. According to the Telegraph, if you start saving at age 40, you should set aside 20 per cent of your income annually.

2. Making minimum contributions

With mortgages and other bills to pay, you might be tempted to make the smallest contribution possible to your pension pot. This may not be enough to give you the retirement sum you need, even when you factor in employer contributions.

3. Not shopping around

There are many options to consider when it comes to planning for your retirement, so choosing those that suit your circumstances the best and offer decent returns makes complete sense. Not shopping around is bad news, so weigh up your different options.

4. Not getting expert advice

Expert independent financial advice can help you make the right decisions when it comes to retirement planning, but many people bypass this. Professionals using financial adviser software, such as that from, can tailor options to suit individual needs.

5. Relying on your partner’s pension

Many people don’t worry about retirement planning because they make the inaccurate assumption that they can rely on the pension of their partner. This comes with risks. If you get divorced or your partner dies, you may not automatically be entitled to their pension.

6. Using your property as a pension

It’s a nice idea that you could rely on your home as a pension pot when you’re older, perhaps by downsizing and using the savings made for living expenses. With rising house prices, this may seem feasible, but you can’t guarantee that prices will continue to keep increasing, and even when they do, you might not make any profit from your house sale to use as a pension fund.