Puzzled about pensions



When it comes to understanding pensions, most people you speak to that pay into a pension don’t really know where their money is invested or how it’s doing. They simply see it as something they can retire on, but can they?

Whilst we really don’t expect people to understand the ins and outs of pensions, we feel that they would take more of an interest in where their contributions are going if they had a better understanding of what the outcome would be at retirement. Nobody can predict the future, but regular reviews of your pension performance can give you the opportunity to make changes which could have a positive effect on your retirement fund.

As experienced financial advisers we regularly carry out impartial reviews of clients pension arrangements. The same issues seem to come up during many of these reviews, each of which can have a major impact on their pension pot. The earlier these issues are addressed the easier it is to influence the returns. Let’s take a look at some of the most common pension problems:

Fees

You should understand that there are lots of different types of pension charges made by providers which can work out to be quite a lot of money when charged on a regular basis.

Final Income

This is probably the most common problem we identify when clients clearly have been paying into a personal pension but have no idea what they can expect in retirement. Finding out as you near retirement age your find is not sufficient doesn’t give you time to do anything about it. When income and expenditure means funds are limited, it makes your choice of pension a very important one.

Default investment option

Many personal and company pensions come with a default investment option which means their savings are invested in pre-selected shares, bonds, companies and other assets. Some may perform well, others really poorly. What lots of people don’t realise is they can change their investment choice for something better. A couple of % lost each year can make a massive dent in your retirement fund.

If you haven’t had a pension review for some time, or you’ve never had one, take action sooner rather than later while you can still make a positive impact on your pension.

If you need any pension help and advice, or would like to book a pension review please call us on 01928 735510, or complete the enquiry form and one of our pension advisors will call you back.