Paul Mitchell | Financial and Retirement Planning Coach
Find him here at: Your Smart Retirement Coach
Picture this: You’ve worked hard for 30+ years, diligently saving into your pension. But what if I told you that simple mistakes could be silently eroding thousands of pounds from your retirement fund?
As a retirement planning coach, I see the same costly errors repeatedly. The good news? Every single one is preventable once you know what to look for.
Here are the five mistakes that could be quietly draining your pension pot – and exactly how to fix them.
Mistake #1: Paying Sky-High Pension Charges (And Not Even Knowing It)
Sarah’s Story: Sarah, 58, discovered her old company pension was charging 1.4% annually. On her £150,000 fund, that’s £2,100 per year – every year.
The Hidden Drain:
- Her old pension: 1.4% = £2,100 annually
- Modern SIPP alternative: 0.45% total = £675 annually
- Money being wasted: £1,425 every single year
Over 15 years until her retirement, this difference could cost Sarah over £30,000 in lost growth.
The Wake-Up Call: Most people have absolutely no idea what they’re paying. When did you last check your pension charges?
Quick Fix: Look for the ‘Ongoing Charges Figure’ on your pension statement. If it’s above 0.75%, you’re likely overpaying.
This is exactly the kind of issue I help clients identify in our coaching sessions. A simple review could save you thousands – isn’t that worth a conversation?
Mistake #2: The “Set and Forget” Pension Trap
Mark’s Reality Check: Mark, 54, hadn’t looked at his pension for 8 years. His fund was sitting in a “balanced” option charging 0.9% annually, growing at just 4% per year while the stock market delivered 8%.
The Opportunity Cost:
- His actual growth: 4% annually
- Market growth he missed: 8% annually
- On £100,000: That’s £4,000 extra growth missed every year
The Problem: Default pension options are often expensive, cautious investments designed to avoid complaints, not maximize your retirement income.
The Solution: Regular pension reviews ensure your money is working as hard as you did to earn it.
I work with clients to understand investment options and build confidence in making informed decisions. You don’t need to become an investment expert – you just need someone to guide you through the process.
Mistake #3: Taking Tax-Free Cash “Because Everyone Does”
The Temptation: Your pension company writes offering £37,500 tax-free from your £150,000 fund. Free money, right?
The Hidden Cost:
- £37,500 in bank at 3% interest = £1,125 annually
- That same money in pension growing at 6% = £2,250 annually
- Opportunity cost: £1,125 per year
When Taking Cash Makes Sense:
- Paying off expensive debt (mortgage, credit cards)
- Essential home improvements
- Creating an emergency fund if you don’t have one
When It Doesn’t:
- “Just because I can”
- Letting it sit in low-interest savings
- Buying luxuries you don’t need
The Smart Approach: Only take tax-free cash when you have a specific, beneficial use for it.
This is a perfect example of why coaching works. Together, we’d explore your specific situation and work out whether taking cash makes sense for YOU – not what everyone else is doing.
Mistake #4: The “Pension Graveyard” Problem
The Modern Reality: Average person has 11 different jobs. Each workplace pension often gets left behind, forgotten and neglected.
David’s Discovery: David, 59, found 6 old pensions:
- Total value: £85,000
- Average charge per pension: 1.2%
- Total annual charges: £1,020
After consolidation into a modern SIPP:
- New total charge: 0.5%
- Annual cost: £425
- Annual saving: £595
The Management Nightmare:
- Multiple statements, passwords, and rules
- No clear picture of total retirement income
- Different providers, different charges
- Some invested well, others performing poorly
The Solution: Consolidation gives you control, clarity, and often significant savings.
I help clients navigate the consolidation process, ensuring you don’t lose valuable benefits while simplifying your retirement planning. It’s like decluttering your pension cupboard!
Mistake #5: Playing Pension “Catch-Up” Instead of “Keep-Up”
The Painful Truth: Starting serious pension planning at 55 instead of 45 costs you far more than you think.
The Mathematics of Delay:
Emma (started at 45):
- £400 monthly for 20 years
- Total paid in: £96,000
- Value at 65: £175,000
Emma’s sister (started at 55):
- £800 monthly for 10 years
- Total paid in: £96,000
- Value at 65: £131,000
Cost of delay: £44,000 – despite identical contributions!
The Compounding Effect: Every year you delay, you need to contribute significantly more to achieve the same result.
The Tax Relief Bonus: Higher rate taxpayers get 40% relief – so £400 monthly only costs £240 net. That’s like getting a 67% instant return!
Even if you think you’re “too late,” there’s always something we can do. I’ve helped clients in their late 50s dramatically improve their retirement outlook with smart planning.
Your Next Steps: Stop the Drain, Start the Gain
You’ve just discovered the five biggest pension drains. Now what?
This Week: The Pension Health Check
- Find all your pensions (use the free Pension Tracing Service)
- Check your charges on every statement
- Calculate your total pension value
This Month: The Strategic Review
- Research modern SIPP options if charges are high
- Consider consolidation for multiple small pots
- Review your investment strategy
This Quarter: The Retirement Reality Check
- Calculate your retirement income needs
- Work out sustainable withdrawal rates
- Create your written retirement plan
The Truth About Getting Help
Here’s what most people don’t realize: You don’t need expensive financial advice to fix these problems. You need education, guidance, and confidence in your decisions.
That’s exactly what financial coaching provides.
Unlike regulated financial advisers who sell products and charge hefty fees, coaching focuses on educating YOU. You learn to understand your options, build confidence in decision-making, and take control of your retirement planning.
My coaching clients typically:
- Identify thousands in potential savings within the first session
- Gain clarity about their retirement options
- Build confidence to make informed decisions
- Create actionable plans for their retirement journey
The Investment: A fraction of what you’d pay for traditional financial advice, but with skills and knowledge that last a lifetime.
Ready to Stop These Mistakes Costing You Money?
Every day you delay addressing these issues is another day of potential losses. But here’s the good news – most problems can be fixed quickly once you know what you’re dealing with.
I offer a completely free 15-minute discovery call where we’ll:
- Identify which of these mistakes might be affecting you
- Discuss how coaching could help your specific situation
- See if we’re a good fit to work together
No sales pressure, no product pushing – just honest conversation about your retirement planning.
Book your free discovery call today and let’s stop these mistakes from quietly draining your pension pot.
Book Your Free No Obligation Initial 15-Minute Discovery Call Here Today→
Because your retirement is too important to leave to chance.
About the Author
Paul Mitchell is a dedicated Financial and Retirement Coach (Qualified To Chartered Financial Planner status) with over 35 years of experience in financial services. Through Your Smart Retirement Coach, he helps clients build confidence in their financial future and create fulfilling retirement lifestyles. As a retirement transition coach, I’m committed to empowering investors with knowledge, perspective, and strategic support.
Book Your Free Consultation Here Now
Let’s find out if you’re truly ready—and help you get there.
Disclaimer:
This article is for educational purposes only and does not constitute regulated financial advice. Pension and investment rules can change, and their benefits depend on your individual circumstances. Always seek FCA-regulated independent financial advice for specific investment decisions, pension transfers, or product selection. As a retirement coach, I provide strategy and education but refer clients to qualified FCA-regulated advisers when regulated advice is required.
