When it comes to our financial priorities, pensions often aren’t at the top of the list until you get closer to the age in which you are thinking of retiring and leaving permanent employment. Whilst this is somewhat understandable, not preparing for your pension is a common oversight when it comes to finances and can be of detriment to your financial security throughout your life.

Claro Money’s Mental Health Report revealed that over a quarter of UK adults (28%) admit to living for the day and letting tomorrow take care of itself when it comes to finances, whilst only 34% of those aged between 25 to 34 had a pension.

To help those who want to understand more about their pensions and take the steps to maximise this, Rachel Harte, Head of Financial Planning, has shared five ways to start planning your pension, whatever your age.

Understand your Pension

If retirement is a milestone likely to be decades away for you, then the word pension may not be at the front of your mind. However, regardless of your age or how far away retirement may be, it is essential to understand and be educated about your pension.

Whether you’re starting a new job or have simply never spoken to your employer about pensions, investigate what schemes they have in place and how these work – find out if you are eligible for the pension based on your salary, if you have been or will be auto enrolled, and whether this pension is flexible when it comes to increasing your contribution. Building your understanding of both the pension schemes available to you, and pensions as a financial concept more generally, will help empower you to make smarter and more conscious financial decisions.

Think about Retirement

Whilst the age you retire is in part dependent upon your financial circumstances, it is also a very personal decision. Even if you are just entering the working world, think about when you might like to retire.

Think about whether you envision retiring as early as you can, or if you imagine as long a working career as possible. This will impact the emphasis you put on saving for your pension and how you may want to approach your career in general, so it’s important to start considering when you want to retire as early into your working life as possible. Of course, this is subject to change, but you can start to research how much you would need to save for how much you would need to live comfortably once you stop working and what contributions you will need to make, based on when you want to retire.

Set your Financial Goals

Building up your pension is a long-term financial goal, however the impact this will have on your outgoings and savings will be very much experienced now.

When it comes to organising your finances, setting goals is key to developing good habits and helping you to get the most out of your money. From setting a target for your emergency savings fund, buying a new laptop, to saving for your first home, these goals should range from expenses you want to make in the not-so-distant future to long-term goals and lifestyle habits.

When establishing goals, don’t just think about your incomings and outgoings but your wellbeing too. For example, if going abroad and travelling is the highlight of your year, make sure you prioritise saving for this. Or, if you find going to a gym and working out with a personal trainer aids your mental health and overall mood, then cut expenses elsewhere so you can afford this. Perhaps it is building up your overall savings and pension that will ease financial and general stresses the most.

Regardless of what they are, setting these goals and working on establishing how you need to both save and spend to achieve these goals is key to developing good money habits. It is also helpful in understanding if, after setting aside funds for your goals, you have any money to spare to put towards your pension in addition to the amount you are currently paying each month.

Adjust your Contributions

Perhaps you have reviewed your financial goals and realised you either need to be contributing more to your pension, or can contribute more, then take the steps to do just this. Your pension contributions shouldn’t be stagnant and fixed throughout your working life.

Often, your employer will provide you with the opportunity to increase your monthly contributions to your pension, up to a certain percentage of your salary. Or you can chat to a pension planner or financial coach about what private pensions are available that might suit you. Opting for a private pension gives you another opportunity to boost your savings for retirement, with many of these investing money in stock market-linked funds which gives you the potential to grow your savings more over the long term.

On the other hand, there may be periods in your life where you cannot contribute the same amount to your pension as you have been doing, or you may struggle to contribute all together. For example, if you are on maternity leave or retraining and in between jobs. While this often can’t be avoided, it is important to consider the impact of this on your pension and try to offset this by contributing more to your pension once you are in the position to do so.

Keep on Top of Your Pensions

As we move to different jobs within our career, it can be easy to lose track of the different pension pots we’ve contributed to. Employers will have different schemes in place, so it’s important to keep note of which providers you have used in the past or speak to previous employers, if you cannot find this information.

Combining all your pots so that your pension contributions are all in one place is a simple way to stay organised and keep on track of how much you have saved so far.

When moving to a new workplace, you may want to consider transferring your pension pot from your last job over to your new one.

Claro Money is the UK’s first digital financial coaching app, offering affordable and accessible qualified financial guidance to everyone in the UK.

Users can speak to a financial coach, build a financial plan, and choose from a range of saving and investment products.