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 yet 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 yet know whether you have a pension shortfall to fill, follow these links:

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

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.

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

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. If you’re employed and haven’t joined a pension scheme offered by your employer, ask for details about it. Many employers contribute to the schemes they offer and by 2018 all employers will have to offer a pension they contribute to (for all eligible workers). If this applies to you, it will make it easier to fill your retirement-income gap.
  2. If you’re already a member of a workplace scheme, boosting your contributions to it may be the most convenient option for you. But you should compare any fees and charges against personal pensions you could use as an alternative.
  3. You can set up your own personal pension plan. The options here include stakeholder plans (which typically have low 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 don’t already have a financial adviser, it may not be a cost-effective option to use one just to deal with this question unless you plan to invest a large amount or have a long time left until retirement. Always check the fees an adviser charges before agreeing to use them.