How to deal with a gap in your pension savings

Most people find they have a shortfall when they come to check their current pension savings. If this applies to you, use our ready reckoner, below, to estimate how much extra you need to save. If you don’t know if you have a shortfall, use the links provided to check.

How to check if you have a pension income shortfall

If you don’t know whether you have a pension shortfall to fill, follow these links:

If you have a shortfall, how much do you need to fill the gap?

Use our Pension calculator to estimate the monthly savings you’ll need to contribute in order to generate a comfortable retirement income.

The cost of filling a shortfall in your projected pension income depends largely on your age.

The further away from retirement you are, the more time you have to boost your pension savings, and the more time your savings have to grow.

Your main options

Once you’ve worked out how much extra you need to contribute to your pension savings each month, you have a number of options.

We’d suggest considering the following, in this order.

  1. All employers must now offer eligible employees a workplace pension and make contributions to it. If you are employed, joining your employer’s workplace pension scheme is the best way to help fill your retirement income gap.
  2. If you’re already a member of a workplace scheme, boosting your contributions to it might be the most convenient option for you. Many employers match the contributions their employees pay, so if you pay more, they also pay more.
  3. If you’re self-employed or not eligible to join a workplace pension scheme you can set up your own personal pension plan. The options here include stakeholder plans (which have capped charges) and SIPPs (which are highly flexible but tend only to be suitable for large funds and for people who are experienced in investing).

Where to get more information and advice

If you need further help, especially if you’re investing money, you can speak to a regulated financial adviser who will go through your options and help you choose the best one for you.

You will have to pay for financial advice, but advisers must go through their fees and charges with you before you commit. You can find a regulated financial adviser through our Retirement Adviser Directory.

Speak to at least three firms and ask about their charges for this type of advice.

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