Today is National Financial Awareness Day — an annual prompt, held each 14 August, to stop and take an honest look at your money. Most of the advice you will see today is about the everyday: check your balance, cancel the subscription you forgot about, shop around on your energy bill. All sensible, and all worth doing.
But there is a category of financial question that almost never gets asked on days like this, largely because the answers take more than five minutes. They are the questions that determine what the last thirty years of your life look like. In our experience, most people arrive at retirement having never been asked any of them.
So here are five, in the spirit of the day. You do not need to answer them all today. But knowing which ones you cannot answer is itself a useful thing to discover.
1. Do you know where all your pensions are?
The average person changes jobs several times over a working life, and most leave a pension behind each time. It is genuinely common to reach your sixties with four or five pots, at least one of which you have lost track of entirely. Today is a good day to list what you think you have — and to use the government’s free Pension Tracing Service for anything you cannot find. You cannot plan around money you have forgotten exists.
2. Do you know what your State Pension will actually be?
Most people assume they will get the full amount. Not everyone does — it depends on your National Insurance record, and gaps are more common than you would think. A free forecast at gov.uk takes a couple of minutes and tells you both what you are on track for and from what age. If there are gaps, there may be options to fill them, but there are deadlines attached, so finding out early matters.
3. Do you know what you actually spend?
This is the question people find hardest, and it is the foundation of everything else. Not what you think you spend — what actually leaves your account each month, and how that will change when you stop working. Some costs fall in retirement: commuting, work clothes, the mortgage if it is finished. Others rise: heating a home you are now in all day, travel, hobbies, and later on, potentially care. A retirement plan built on a guess about spending is a guess about retirement.
4. Do you know how you will turn your pension into income?
Having a pension pot and having a retirement income are two different things. Broadly, the options are a guaranteed income for life through an annuity, flexible withdrawals through drawdown, taking tax-free cash, or a combination. Each has different consequences for security, flexibility, tax, and what happens to your money when you die — and some decisions, such as buying an annuity, cannot normally be undone once made. Free impartial guidance on all of it is available from MoneyHelper, including Pension Wise appointments for the over-50s.
5. Does anyone else know?
The least comfortable question on the list, and the one most often skipped. If something happened to you tomorrow, would your partner know what you have, where it is, and who to contact? Would they know your wishes? Financial awareness is not only about understanding your own position — it is about not leaving someone else to piece it together at the worst possible moment.
Awareness is the easy part
The point of a day like today is not to solve everything. It is to notice the gaps. If you got through those five questions and answered all of them confidently, you are in a better position than most people we speak to. If you did not, that is not a failure — it is simply information, and it is a great deal more useful to have it now than at 64.
If you would like help answering any of them, that is what we do. Our retirement planning service starts with a free, no-obligation conversation — no jargon, no pressure, and no judgement about what you have or have not sorted out yet.
This article is for general information only and does not constitute advice. The value of investments can go down as well as up and is not guaranteed. Tax treatment depends on your individual circumstances and may change in the future. An annuity cannot normally be changed or cancelled once set up. Free impartial guidance is available from MoneyHelper, including Pension Wise for the over-50s. Our advised services are provided on a fully advised basis by FCA-regulated advisers. Retirement Professionals Ltd is an appointed representative of pi financial ltd, authorised and regulated by the Financial Conduct Authority. FCA number 622943.