Social mobility: How your pension can bridge financial gaps

As we celebrate Social Mobility Week, it's a great opportunity to reflect on how financial planning, particularly through your pension, can play a crucial role in enhancing social mobility and securing a brighter future for you and your family.

Understanding Social Mobility

Social mobility refers to the ability to move up the economic ladder, improving one's social and economic status. It is influenced by various factors such as education, employment opportunities, and financial stability. Unfortunately, financial disparities can create significant barriers, making it challenging for individuals from different social strata to advance.

The Role of Pensions in Social Mobility

Your pension is not just a safety net for retirement; it is a powerful tool that can help bridge financial gaps. By strategically managing your pension, you can pave the way for a more secure and prosperous future.

Fidelity’s latest Global Sentiment Report shows that 39% of UK workers aren’t confident about saving for retirement^*. The good news is that even if you haven’t taken saving into your pension seriously until later in life, it isn’t too late to make meaningful progress. Here's how:

1. Give your pension a health check
   By actively engaging with your pension plan, you can look out for any financial gaps and opportunities for upward social mobility. Your pension is more than a retirement fund; it's a stepping stone to achieving financial independence and ensuring a secure future for you and your loved ones. With PlanViewer, you can regularly review your workplace pension and see how you're tracking towards meeting your future financial goals. It gives you a clear view of how much is in your pension, what your contribution rates are and projected pension pot. Read about how I got my pension back on track with PlanViewer.
2. Start early and keep going
   Starting your pension contributions early can make a substantial difference. Even small, regular contributions can accumulate over time, providing you with a good financial foundation. For many of us, pausing pension contributions when rent, bills and groceries start to pile up feels like the only sensible option. But there’s one simple reason to keep going if you can and that’s something called compound growth.
   
   Picture rolling a small snowball down a hill. As it gathers momentum, it picks up more snow, growing ever larger - and the bigger it gets, the more snow it collects along the way. Your pension pot works the same way. Each contribution you make adds to your balance, and the returns you earn on those contributions begin to earn returns of their own (although returns aren’t guaranteed, and the value can fall as well as rise). But, over time, this can help transform even modest savings into a substantial nest egg.
3. Make small changes if possible
   And if you’re starting later than you’d hoped, don’t worry - regular, small boosts can still make a difference too. Our Power of small amounts calculator will help you see how modest boosts to your monthly contributions (1% to 5%) can help grow your pension pot over time. By moving the slider in this helpful tool, you’ll be able to see the difference a few extra pounds today could make for your future.
4. Knowledge is power: Join our free financial wellness webinars
   If you want to take control of your finances, we have a few webinars coming up designed to help you plan for the future and become more financially resilient. You'll have the chance to ask questions too. There’s even one on financial wellness coming up soon, just ensure you sign up in advance to reserve your spot as they fill up quickly. You can find details of all our upcoming webinars here.
5. Understand the importance of financial wellness
   Our latest survey showed that 16% of workers spend slightly more than they can afford, while 12% spend much more than they can afford^*. If money talk wasn’t part of your upbringing, you might find budgets and balance sheets intimidating. The trick is to start with small steps - perhaps by tracking your spending for a month and setting a simple budget. Feeling in control today lays the groundwork for bigger goals tomorrow, like a comfortable retirement. Our Financial Wellness page has tips on budgeting, managing debt, building up savings, and protecting what you’ve worked hard for. It’s a great place to start and adopt healthy financial habits to last a lifetime.

Empowering the next generation

Education is one of the most powerful drivers of social mobility, helping level the playing field for children from all backgrounds. Yet too often, those born into less affluent families face greater barriers to success. That’s why we set up the Fidelity UK foundation to support organisations working to improve opportunities for children and young people facing disadvantage.

But, actually, we all have the power to affect change by talking to our children, nieces, nephews or grandchildren about money matters. Early conversations shape how we think about spending, borrowing and, crucially, saving for the future.

When my children were little, we didn’t give in to every “can I have this?” moment in the gift shop. As they got older, we encouraged them to save their pocket money and think carefully about what they truly wanted. Now, with my eldest approaching adulthood, we’ve been talking about her Junior ISA - not just as a sum of money, but its potential to create real opportunity.

So, this Social Mobility Week, do take a moment to pause and reflect. Our pasts don’t have to define our futures - or our children’s. As education and small changes can pave the way to a more confident financial future for us all.

Help is available when you need it

If you need advice on retirement planning, the government provides free support. If you’re aged 50 or over, the Pension Wise service (part of MoneyHelper) offers free, impartial appointments to help you understand your options.