The UK’s top newspapers are screaming out about Britain’s economic downturn. In particular, over the last few months there has been a general consensus of how the depressing state of our economy is exacerbating a looming pension crisis. On top of this, many of us now face the real threat of redundancy. For those of us fortunate enough to rely on the steady income of a job, there seems to be a growing number of friends or acquaintances who are being forced out of work by their employers.

Many of us are really feeling the pinch as households struggle more than ever to keep up to check with their personal finances. The combining number of factors including rising utility bills, higher inflation and pay freezes means that we have less disposable income than ever.

Employers also have had to make cuts, unfortunately resulting in the very real threat of redundancy for thousands of workers. Redundant workers, quite rightly, have enough on their plates already than to also worry about contributing to a pension fund which they may have set up whilst in employment.

But rather than tighten the purse strings and sacrifice a few guilty pleasures, people, both in and out of employment, are now opting-out of contributing towards their pension fund. A report by the Office of National Statistics suggests that over the last four years a million people have pulled out of their personal pension funds in order to compensate for a lower disposable income. Whilst this decision may alleviate pressure on personal finances in the short-term, it poses great problems in the future when individuals want to retire.

Why is this is resulting in a pension-panic for the future?

Pension advice experts have already questioned whether the current contribution of 8pc of your salary is enough to produce a pension which you can actually live off. Irregularly contributing to your pension fund, or worse still opting out of a fund all together if you are made redundant, leads to big problems in the long-term.

It may mean that you may have to work longer, forcing you to retire later out of financial necessity. Your retirement income may also be significantly lower than what you had hoped for, affecting your quality of life in retirement; a time that you have worked hard to enjoy. It may be worth receiving pension advice to see what steps you can take now to avoid what Lord McFall of Alcuith, the former chairman of the Commons Treasury Select Committee and chairman of the Workplace Retirement Income Commission (WRIC), calls a “bleak old age” in retirement.

A Vicious Pension Circle? Sounds scary.

It is. Many companies are forcing redundancy onto their employees not only because of a need to make financial cuts during a recession but because their employees are wanting to work longer to make up for their smaller pension pots. We are faced with a vicious circle; due to increased costs of living it is harder to save for future pensions, but we need a larger pension fund to cover the increased cost of living. The cost of living for pensioners is also up because they spend more money on food and energy bills such as heating. Coupled with increasing food and energy, rising inflation means that pension payout rates are also crashing. Because of this it is best to seek immediate pension advice about how best to avoid major problems in the future.

What’s the best decision to make?

Take control of your retirement pot. As a nation we worry that taking control of finances can be seen as a greedy trait. It couldn’t be further from the truth. Taking responsibility of your savings and forward planning safeguards you and your family’s standard of living in the future. During any economic recession, it is important to re-prioritise your finances. Is that expensive meal out really worth compromising your future pension fund for? Of course, it doesn’t mean cutting out all of life’s pleasures but many of us will have to re-balance the contributions to our savings, including our pension fund. Before making any rash decision involving your pension, talk to a pension advisor and see what options are available. Seeking pension advice to chose the best pension policy for you is a start but you should also regularly review your policy, making sure your money is working the hardest it can for you.

Regardless of what experience you have organizing your personal finances, it’s important to have a straightforward system to help. Take a look at these great tips to organize your bills and personal finances.

1. Take paper out of the equation.

Today, almost every bill you have can be paid online which means everything can be handled digitally. It may seem like a bit of a challenge at first, but it makes managing your personal finances a lot easier to do down the line.

The concept of going paperless may be a bit confusing. All it really means is instead of getting your bills through the mail you’ll go to the websites of your service providers and set up online accounts. Once you do, you will be given the option of going completely paper free, which means your service providers will stop sending you paper statements, bills and promotional offers that you’re used to seeing in your mailbox. You’ll receive email alerts when your bill is due and can pay your bill on their website instead of writing a check and mailing it in. When it comes to your household and financial accounts, you’ll never have to lick a stamp or seal an envelope again.

The two major reasons to pay your bills online and go paperless are:

A. You’ll help protect the environment by reducing your use of paper.
B. You can reduce the clutter of paper in your house and help save your sanity.

Not only does getting rid of the stacks of paper they send each month going to relieve a lot of stress but it helps to save the environment as well.

2. Pick an organizational system that fits your needs.

When it comes to organizing your personal finances, one size does not fit all. Even though many believe that paying your bills online is the only way to go, that’s only the first part of this four-step process. Even though you have all of your accounts set up electronically, you’ll still have to find a way to make sure they’re all in one place. Otherwise, you will have to go from site to site, and with that many usernames and passwords, you are bound to forget a few.

There are two different ways to go about doing this. First, you can purchase bill-organizing software, such as Moneydance and Family Finance Planner. These packages give you the ability to manage bills and organize your personal finances from one program. You can pay your bills, view important account documents, and receive alerts when important due dates are approaching. Many packages available will also give you the ability to create a budget and will help you to stay within it by letting you know if you’re exceeding it or if you’ve got funds left.

If purchasing financial software doesn’t appeal to you, you can do what many do and create a financial spreadsheet using Microsoft Excel. It’s a bit more complicated, as it requires more manual labor, but like with most tasks that’s been mentioned here, it will pay off in the long run. There is no law that says financial spreadsheets have to be the same, so create one that represents your financial life. Note which bills you have to pay, how much they are for and when they are due. Subtract your monthly finances from your monthly income so you know how much money you have to spend each month. Once the bill is paid, mark it paid in the spreadsheet so you’ll have the peace of mind that it’s been taken care of until next month.

3. Think about the future.

Planning for your financial future plays a big part in organizing your personal finances now. Unfortunately, life isn’t predictable and putting together a financial plan for the future so you can handle anything that can happen which means it’s important to set financial goals for your future.

Setting up a savings account for emergencies is a great start. Putting back six to nine months of living expenses gives you money to use should something happen. This money should be used for emergencies only, hence the name “emergency savings account,” such as paying for rent and utilities after losing your job.

Setting up a retirement savings account is another great way to plan for your future. Your employer may offer access to a 401(k) which is a good example of a retirement account. Every time you get a paycheck, you can contribute a portion of it to this fund. These accounts are designed for your employer to match your whole contribution or at least a part of it.

Retirement funds like these can give you the future you want, whether it’s sailing a way to Bora-Bora or simply being able to do the basic things we enjoy like going to the movies and taking yearly vacations after you retire.

4. Don’t stress.

The old quote “There ain’t no stress like money stress, but you can only worry so much.”, basically means, don’t go crazy worrying about your finances. Worry enough, and then let it go. Using these steps, create a budget and implementing the financial bill organizer that works for you. Then, just enjoy your life!