In its simplest terms, a pension is basically money you'll use to live on in the future.
Most people will receive a State Pension but this only provides for your basic needs (and the maximum amount is only £168.60 per week, which is also taxable). To ensure you have the standard of living you want in retirement it's best to save into a pension, and regularly review it.
Once people have set up a pension, often it isn’t reviewed for several years. This can lead to poor returns from the pension and a disappointment when they reach retirement and their pension is much smaller than they expected.
How will reviewing my pension help me?
There are a range of reasons, it can:
Help boost the performance of your pension.
Highlight any shortfalls in good time.
Help you retire sooner.
What should I review?
Whether you choose to review your pensions yourself, or use an Independent Financial Adviser (IFA), some of the questions you should be considering are:
How much do I realistically want to retire on? Am I contributing enough?
Have I considered my attitude to investment risk? Has it changed since I last reviewed it?
Are the funds my pension invests in suitable to my attitude to investment risk?
How have the funds performed? Are they underperforming?
Should I take less investment risk as my retirement draws nearer?
What are the charges on my pension and are they competitive?
How does my pension allow me to take income of a lump sum from it?
How often should I review my pension?
At least annually, but more if investment markets or your circumstances have changed significantly.
Every year your Pension Provider will send you an Annual Pension statement, which is an ideal reminder to review it. The Statement will confirm your current pension size, where it is invested, the charges, and an estimate of the annual income likely to be paid at the Retirement Age noted your plan.
Why seek the help of an Independent Financial Adviser rather than doing it myself?
Pension are complex and the danger is that often, you don’t know what you don’t know if you are reviewing them yourself. A professional adviser will make recommendations and help you in many ways including:
Helping you work out how much you will need to retire on.
Recommending a monthly contribution to make it much more likely you will hit your target income.
Help you to understand your attitude to risk; using questionnaires and through conversation.
Ensuring your pension is diversified, invested in many assets, rather than ‘having all your eggs in one basket’ – this can lead to increased performance and a reduction in larger falls in your pension value
Reviewing your pension for its competitiveness – older style pensions often have higher charges than newer pensions available today – higher charges will reduce the value of your pension
If you have several pensions, analysing and reviewing them and making a recommendation to you to combine them, or not.
The real value of independent pension advice is seen over the longer term with regular reviews. Your IFA will meet you on a regular basis (at least annually) to review your pensions and make recommendations to adjust your pension as markets, the economy or tax rules change to ensure you to stay on track to achieve your longer-term life goals.
Arrange a Meeting with one of our Independent Financial Advisers (IFAs).
If you think your pension would benefit from a review, the first step is to contact us at info@martin-redmanpartners.co.uk or call us on 01223 792 196 to arrange an introductory meeting with one of our expert pension advisers, at no cost to yourself.
About Martin-Redman Partners
We are a team of experienced Independent Financial Advisers (IFAs) who can advise on your personal or business financial arrangements. We have been building trusted relationships with clients for many years by articulating clear and tailored recommendations in areas ranging from investments to retirement planning, to complex estate planning advice.
We offer expert independent financial advice throughout Cambridgeshire, Leicestershire, Suffolk, East Anglia and the South East. Many of our clients are within, or are in the surrounding areas of Cambridge, Grantham, Stamford, Bury St Edmunds, Frinton on Sea, Ely, Peterborough, Huntingdon, Cambourne, Newmarket, Soham and Oundle.
The information contained is for guidance only and does not constitute financial advice. It is based on our understanding of UK legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly, no responsibility can be assumed by Martin-Redman Partners its officers or employees, for any loss in connection with the content hereof and any such action or inaction.