What is a Pension Review and How Should It Work

Having resolved to tidy up your finances in 2025 you might be at a loss of where to begin. Reviewing your pension is a great starting point.

Paying into a pension, whether it’s via your employer or a private pension, is probably one of the best vehicles to enhance your financial well-being over your lifetime.

It can be easy to forget about your pension if you joined or established your plan a long time ago are contributions are deducted from your salary through payroll each month.

But now is your call to take another look at your retirement plan. Recent updates to pension rules, an increase in your salary or your age may mean that you’re missing some opportunities for retirement savings.

Additionally, perhaps your investment strategy needs an overhaul or you’re in the wrong pension structure.

Why are Pensions Important?

If you’re reading this article, it’s likely that you already have a private pension in place and you understand the importance of saving now for your retirement, whether that is in five or fifty years’ time.

According to a new report from the Pensions Council, prepared by KPMG, a single person would need an annual pension of €33,600, while a couple would require €43,200, to maintain a ‘comfortable’ retirement in Ireland.

Considering that the highest current state pension is just over €15,000 per annum, there is a significant shortfall there for people who are used to enjoying a ‘comfortable’ lifestyle.

Those who wish to enjoy their retirement with overseas travel, treats for grandchildren and potential to maintain a house, car and garden to a high standard are likely to require significantly more funds. We’ve explored this topic in more detail in a previous article here.

What Is a Pension Review?

A pension review involves assessing various aspects of your current pension arrangements to ensure they align with your retirement goals and that you are maximising your retirement potential within your current resources and abilities.

Typically, you’ll engage a Financial Planner who will analyse your pension’s performance, fees, and suitability relative to your retirement goals.

The objective of a pension review are to:

• Assess current pension value
• Evaluate investment performance
• Identify potential gaps in retirement savings
• Ensure alignment with retirement goals

Factors to Consider During the Review

• Current pension value – understanding the total value of your pension funds as a collective pot will enable your Financial Planner to project your options, likely tax-free lump sum and ongoing income at retirement.
• Investment strategy – reviewing how well your pension investments have performed and evaluating your investment strategy according to your capacity for and attitude to risk.
• Charges & fees – identifying all associated costs, such as fund management charges and policy fees.
• Contribution levels – assessing your current contributions; percentage of salary, frequency, additional voluntary contributions (AVCs).
• Pension fund allocation – examining how your funds are distributed across different investment options.
• Tax relief & benefits – ensuring you’re maximising available tax reliefs and benefits.
• Pension structure – reviewing the type of pension(s) that you hold and ensuring they are the correct structure for your circumstances.

Depending on your career and methods of pension planning in the past, your retirement savings may be in just one single account or dispersed across multiple policies. During a pension review you should look at all pensions and retirement plans that you hold collectively as one entire pension fund.

Don’t forget to make sure you’re tracking all of your retirement savings and not losing track as the years pass by. Even if you only paid into a pension scheme for a short time years ago in one of your first jobs, it’s important not to lose track of these.

There are various reasons why you might either like to try and combine all of your retirement savings into one ‘pot’ or why you might decide to hold several different pension policies separately depending on your long-term plan for retirement and draw down of funds. Your personal approach can be discussed with your Financial Planner.

Why Do You Need a Pension Review?

A regular pension review is the best way to ensure that your retirement goals are met. Confirming your pension is on track to provide the desired retirement income will give you peace of mind about your lifestyle and income after you stop working.

Any shortfalls in your retirement fund can be identified during a pension review, giving you more opportunities to close potential gaps in savings and maximise any retirement planning opportunities that arise.

Remaining up to date on pension rules, legislation and opportunities to plan for retirement is also important. The amount of tax relief that you can receive increases as we age and where resources allow there is potential to increase contributions and boost savings.

Regular assessments of your investment strategy and returns can enhance the performance of your pension investments.

A regular pension review helps to adjust for life changes such as windfalls, career breaks, marriage, new employment or illness. It can also help you to minimise costs by reducing unnecessary fees that may erode your pension value and maximise tax benefits by taking full advantage of available tax reliefs.

Benefits of a Pension Review

• Maximise retirement income. Potentially increase the funds available to you at retirement.
• Minimise risk. Aligning investments with your risk tolerance and capacity to avoid undue exposure and to also maximise potential depending on your timeline.
• Ensure tax efficiency. Pensions are the most tax efficient way of saving and investing in Ireland.
• Improve financial security and strengthen your overall financial position for retirement.
• Facilitate informed decision-making. Understanding your options to make better financial decisions.
• Achieve peace of mind and feel confident that your retirement planning is on track.

How Often Should You Request a Pension Review?

Our general recommendation is to review your pension annually. While there are no strict rules, regular reviews are considered best practice in Ireland.

Significant life events or changes in financial goals may necessitate more frequent reviews. Changes in employment or salary are the most common factors that may require a change in pension planning but there are myriad other influences that determine the optimum retirement plan for you.

The ten years leading up to your planned retirement age and the ten years following retirement are generally the most important time to stay frequently engaged with your Financial Planner. This is the trickiest period for investment of your funds and deciding on the best retirement options for you.

Finding the Right Adviser for Your Pension Review

When you’re looking for a Financial Planner to assist you with retirement planning, there are several factors to consider.

• Credentials & Experience – seek advisors with relevant qualifications and experience in retirement planning.
• Transparent fee structure – ensure you have clarity on how advisors are compensated and consider the affordability of the adviser’s services.
• Quality of reviews – look for advisers who provide thorough and insightful analysis.
• Specialisation – choose someone who is experienced in pension planning.

Conclusion

Regular pension reviews are essential to ensure your retirement plans remain aligned with your goals and adapt to any changes in your circumstances or to external factors such as legal and regulatory changes.

By staying informed and proactive, you can optimise your pension’s performance and be well prepared for your retirement.