5 Costly Pension Mistakes You’re Making Now (And How to Fix Them)

Are These Pension Errors Costing You Thousands?
Pension experts Lisa Picardo (PensionBee) and Claire Trott (St. James’s Place) reveal the top 5 pension mistakes that could leave you with less retirement income than you expect.

1. Losing Track of Old Pension Pots
❌ The Mistake: Forgetting about pensions from past jobs
💡 Why It’s Bad:

4.8 million UK pensions are “lost” (PensionBee research)

Multiple small pots = higher fees & harder to manage
✅ The Fix:
✔ Consolidate pensions into one pot
✔ Use the Pension Tracing Service (Gov.uk link)

2. Missing Out on Free Employer Contributions
❌ The Mistake: Not maximizing workplace pension matching
💡 Why It’s Bad:

Employers often match extra contributions (free money!)

Missing this is like turning down a pay rise
✅ The Fix:
✔ Check if your employer offers contribution matching
✔ Even 1% extra can make a big difference long-term

3. Starting Too Late (Or Contributing Too Little)
❌ The Mistake: Delaying pension savings for “later”
💡 Why It’s Bad:

Compound growth works best over decades

Waiting until your 40s or 50s means playing catch-up
✅ The Fix:
✔ Start as early as possible (even small amounts help)
✔ Use a pension calculator to see growth projections

4. Ignoring Tax Relief
❌ The Mistake: Not claiming full pension tax relief
💡 Why It’s Bad:

Basic-rate taxpayers get 20% top-up from HMRC

Higher earners can claim 40% or 45%
✅ The Fix:
✔ Check if you’re claiming all relief (especially if self-employed)
✔ Consider salary sacrifice for extra tax savings

5. Not Reviewing Investments
❌ The Mistake: Keeping pensions in default funds forever
💡 Why It’s Bad:

Default funds may be too cautious for long-term growth

Your risk tolerance changes over time
✅ The Fix:
✔ Review investments every 2-3 years
✔ Consider diversified funds or ethical options

How to Fix These Mistakes Today
1️⃣ Find lost pensions (use the Pension Tracing Service)
2️⃣ Increase contributions (aim for 12-15% of salary including employer payments)
3️⃣ Consolidate old pots (lower fees, easier management)
4️⃣ Check tax relief (don’t miss free government money)
5️⃣ Review investments (optimize for growth)

💬 Lisa Picardo (PensionBee) says:

“Small steps now can lead to thousands more in retirement. Don’t wait—take control today.”