Your workplace pension was designed to get you started. It was never designed to be enough
The less comfortable truth is that auto-enrolment was always designed as a floor, not a finish line. So learn what you can do about it.
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Your workplace pension was designed to get you started. It was never designed to be enough
Most people who’ve been in employment for the past decade or so have a workplace pension. Thanks to auto-enrolment, contributions have been going in automatically – yours, your employer’s, and a top-up from the government via tax relief. For millions of people, it’s been running in the background without them having to think about it much.
That’s the good news.
The less comfortable truth is that auto-enrolment was always designed as a floor, not a finish line. The minimum total contribution – currently 8% of qualifying earnings – was set at a level that would get people saving, not necessarily get them all the way to the epic retirement they’re dreaming of.
Most independent experts agree it’s not enough for most people. The government knows it too, which is why a formal review of pension adequacy is currently underway.
But that review will take years, and whatever changes come out of it will almost certainly apply going forward – not retrospectively. If you’re in your 50s or early 60s, you can’t afford to wait for the system to sort itself out.
The good news is you don’t need to. Here’s what to actually do if you’re sitting there wondering.
Step 1: Find out what you’ve got
If you’ve worked for multiple employers over the years, you likely have several pension pots in different places, some active, some frozen, some you’ve probably forgotten about entirely. Tracking them all down is the unglamorous and rather tedious first step, but it matters.
Check your current workplace pension, dig out old statements from previous employers, and think about whether you have any older personal pensions sitting dormant. The government’s pension tracing service can help if you’ve lost track.
Step 2: Check your State Pension forecast
The State Pension – now worth £241.30 a week, or just over £12,500 a year – is the foundation most people build from. But the amount you actually receive depends on your National Insurance record, and gaps are more common than people realise – from time out of work, caring responsibilities, self-employment, or years spent abroad.
You can check your forecast and fill gaps at gov.uk/check-state-pension. For many people, paying voluntary NI contributions to plug those gaps is one of the best-value financial moves available. Don’t skip this step.
Step 3: Work out what retirement will actually cost you
Most people focus on what they have without ever defining what they need it for. Before you can know whether you’re on track, you need a number to aim at.
Start with your current spending and adjust for retirement life. Some costs will fall , like commuting, work clothes, maybe a mortgage. Others will rise like travel, leisure, health, time with family. The Pensions UK Retirement Living Standards give you a useful benchmark: a comfortable retirement for a single person currently costs around £43,900 a year; for a couple, around £60,600. But treat those as a starting point, not a prescription. Your life has its own costs.
Step 4: Compare the two
Once you have a rough picture of what you’ll have coming in – State Pension, workplace pensions, any other savings or income – and what you’ll need, you can do the maths. Many people who’ve been anxious about this find the gap is smaller than they feared. Some find there isn’t one at all.
If there is a meaningful gap, you have more options than you might think: contributing more now, using carry-forward allowances from previous tax years to make a larger lump-sum contribution, adjusting your retirement timing by a year or two, or simply restructuring what you already have more efficiently.
A gap identified at 55 is very manageable. The same gap discovered at 64 is a much harder problem.
The bottom line
Auto-enrolment did something important – it got millions of people into the habit of saving. But a habit isn’t a plan to have enough and use it well. Knowing you have a pension isn’t the same as knowing it’s enough to rely on.
That information is available to you. It just requires a few hours of honest number-crunching and the willingness to look.
How to Have an Epic Retirement walks you through exactly this process – from tracking down your pensions to building a clear picture of what you’ll have and what you’ll need.
Easter is behind us - and you know what that means? We’re on the run in new financial year, the new state pension rates are in place and so are the new benchmarks from Pensions UK for how much you need for a comfortable (or a moderate or modest) retirement.
I’m on the home stretch of the production the UK edition of the How to Have an Epic Retirement Flagship Course. The course is completely rebuilt for the UK system and has UK experts coming along for our Live Q&As too.
You can register your interest here (no obligation), and we’ll be launching at pilot pricing (very low for this first run so we can gather feedback and refine it with you). It won’t be long now…. We anticipate our UK Pilot course will start in late May and go for 6 weeks finishing right as Summer holidays hit. So if you’re curious - sign up to learn more.
And if you haven’t caught my recent reels on social media, I’ve been doing a few short micro-lessons breaking down how to navigate retirement step by step. Worth a follow if you’re not already across them — link below.
Have a great Sunday! And until next week — make it epic.
Cheers,
Bec Xx
Author, podcast host, columnist, retirement educator, and guest speaker
Get your copy of the UK Bestselling pre-retirement guidebook, How to Have an Epic Retirement: Your ultimate guide to living well, loving life and retiring with financial confidence.
I am the retirement columnist for The Times. I write fortnightly. Here’s a few of my recent columns:
The real risk from AI isn’t losing your job — it’s wrecking your retirement
A drop in income at 30 is inconvenient but at 50 it can be a disaster. We all need to wake up to the risks
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What I’ve heard should alarm every politician in the country
In an open letter to the government, Times Money’s retirement columnist sets out why people aren’t saving like they should
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The six biggest retirement fears — and how to solve them
Prepare for all the things that feel scary about giving up work, from running out of money to finding a way to fill up your time
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