The nights are drawing in, temperatures are taking a tumble, and the leaves are becoming tinged with gold − all unmistakable signs that autumn is settling in and summer is fading from view.

Less easy to detect, perhaps, is the fact that we are also in the midst of Pension Engagement Season.

Running throughout autumn and winter, the campaign is designed to help people understand more about their retirement savings. This applies to both the basics of where pensions are held and how much has been saved, through to navigating the decisions that individuals will face at retirement, including how pension pots could be used.

Campaign kick-off

It has been coordinated by the Pensions and Lifetime Savings Association (PLSA) and the Association of British Insurers (ABI), with support from major pension industry stakeholders. Activity kicked off in earnest at the beginning of Pension Awareness Week with an updated ‘Pension Attention’ campaign video fronted by reality TV personality Gemma Collins.

The short film is a parody of a face cream advert, drawing a link to research highlighting that more than half (57%) of Britons bought anti-ageing products in the last 12 months but less than a quarter (23%) put effort into organising their finances for later life.

One of the campaign’s core messages is for people to check whether they have any unclaimed pension savings, with an estimated 2.8 million pots totalling around £26.6 billion thought to be either lost or forgotten. This is also the focus for National Pension Tracing Day on 29 October, a separate campaign that is encompassed within Pension Awareness Season.

Keeping savings on track

Often, the focus of pension engagement activities is placed on younger audiences, who have benefited from the introduction of auto-enrolment in workplace pension schemes but are typically likely to have lower levels of engagement with long-term savings plans.

Indeed, research from Scottish Widows has found that up to one in four twenty-year-olds are failing to save anything for retirement – one of the statistics that has prompted the company to boost engagement activity via digital channels including TikTok in an attempt to extend the reach of their retirement savings message among younger generations.

But it is not only younger people who should be thinking about paying their pension some attention. The fact that an estimated 38% of people are not on track to achieve a minimum retirement lifestyle underlines the point that those closer to retirement must also give serious consideration to how their lifestyle will be funded in older age.

This can be particularly true for the self-employed, who are unlikely to benefit from automatic enrolment into a workplace pension scheme and, therefore, must take responsibility for managing their own pension savings.

Worrying awareness levels

For individuals in this situation, there is a risk that the demands of day-to-day living costs are prioritised over plans to facilitate sufficient levels of financial support in later life. Indeed, pension awareness among the self-employed has been described as “worrying”, with just 5% aged between 35 and 54 able to answer three key questions about pensions correctly in one survey.

Recently, this has even prompted the suggestion that the self-employed should be auto-enrolled at a set level of contribution when they file an annual tax return.

It is thought that as many as two in five (41%) self-employed people are not paying into a personal pension, and an even greater proportion (44%) do not know about self-invested personal pensions (SIPPs), which can provide individuals with an effective and tax-efficient way of building up a pot of retirement savings.

Flexible contributions

With a SIPP, savers are in control of how much they save and how often. There is the flexibility to make regular contributions or to pay in lump sums, and there is also great deal of choice when it comes to the investment options available – and when navigating these decisions, guidance from a regulated financial advisor can provide very valuable help.

When contributing to a SIPP, you benefit from tax relief worth up to 100% of your annual earnings up to the maximum allowance of £60,000 – although this limit reduces by £1 for every £2 of adjusted income earned over £260,000, down to a minimum threshold allowance of £10,000. Any unused annual allowance from the three previous tax years can also be carried forward.

Tax relief is either claimed automatically on your behalf by your pension provider (relief at source) or, for higher-rate and additional-rate taxpayers, extra tax relief can be claimed via a self-assessment tax return.

Planning for the future

In the context of maximising your retirement savings, issues such as tax relief are important considerations. And supported by the expertise of professional financial adviser, self-employed individuals have an opportunity to grasp their pension potential and ensure they have the measures in place to fund their lifestyle ambitions in retirement.

With more than 3.5 million people inspired to take action following the last engagement campaign, it seems now is definitely the season to pay your pension some attention.

The information contained within this communication does not constitute financial advice and is provided for general information purposes only. No warranty, whether express or implied is given in relation to such information. Vintage Wealth Management or any of its associated representatives shall not be liable for any technical, editorial, typographical or other errors or omissions within the content of this communication.