Interactive Investor

Let’s get our retirement plans on the table

26th March 2021 15:00

Rebecca O'Connor from interactive investor

Imagine if we talked about our pensions as much as we talked about property, says Rebecca O’Connor.

This week, interactive investor launched its third annual Great British Retirement Survey. It’s a hugely valuable piece of research into the nation’s retirement hopes and realities.

One reason it is so valuable is that it fills some huge knowledge gaps around our attitudes to - and our preparation - for retirement.

Official data tells us a lot but does not give us an holistic picture of the state of the nation’s retirement plans.

Plus, we just don’t tend to chat much about our pension arrangements. I discuss all sorts with my family and friends openly. Do I know whether they are on track for a decent retirement? No.

But imagine, for a moment, if we talked about our pensions as much as we talked about property?

We’d have a better idea of whether we are on track for a decent retirement, because we would be able to compare our pension to other people’s. We might feel competitive about our pensions, wanting to out-do friends in conversations about whether we maxed out our AVCs, in much the same way you might discuss how much it cost to install underfloor heating.

What if there was such a thing as a “pensions ladder”? And we could read reams of newspaper articles about climbing it, motivating and inspiring us to reach further and ‘find our (pensions) happy’.

If the nation discussed different types of pension fund as much as we discussed kitchen extensions, imagine how much this could open our eyes to the investments held within our pensions – the companies we are investing in, and the amount of risk we are taking on?

What’s the property equivalent of your pension? Is it an unloved 1940s semi that needs some work to achieve its full potential? Or a thoroughly modernised and extended Edwardian detached?

There are as many types of pension circumstances as there are types of property, but our knowledge of our old schemes from former jobs may be shabbier than a 50-year old Axminster.

Over the course of a lifetime, it’s possible that our total pension wealth could exceed the amount of equity we have in a home. But I bet there are more of us who know the precise value of our property, than the total value of our pension pot.

Admittedly, a tax-efficient investment wrapper does not have the aesthetic appeal of a new interior design scheme, which might go some way to explaining why we don’t discuss this hugely important aspect of our lives quite so much with others.

But the investments within our pension – the companies invested in, rather than the financial performance of a fund, can be discussion-worthy, particularly if they are in companies with strong environmental or social selling points.

Whether we are on track for a self-sustaining retirement has huge implications not just for us, but for our families too.

And after a year of some quite dramatic financial ups and downs, it’s more important than ever that we know where we stand.

So if, like us, you think it’s time to hit the refresh button on retirement planning and get the nation talking more about pensions, take 15 minutes to fill out the survey. There’s a top cash prize of £1,000 in the prize draw, too. Which of course, could make a great top-up for your pension.

Rebecca O’Connor is head of pensions and savings at interactive investor.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.