If you were given a large sum of cash, perhaps £100,000, to invest then we are certain that you would take great care in how this was invested, you would clearly understand the risk you were taking and the charges you were paying. You would probably take financial advice and would be certain about what you would be doing and why you would be doing it!
If you were to take the same £100,000 and buy a property you would understand the perils and pitfalls involved. Ultimately you would clearly see the value of your invested capital and you would have a plan as to how you will benefit from your investment in the future.
Pensions quite often seem to be the exception to this rule and yet pension pot values of £100,000 plus are very common. It is worrying, but perhaps unsurprising given the perception of rules and regulations surrounding pensions, that a significant number of people simply do not know how much they have saved for their retirement.
So pensions in that respect do appear to be unique. A pension is though your own money and it is your own retirement that we are talking about. A retirement that we hope will last for many years and your pension should be there to generate your capital requirements and income for life. So as you approach your retirement or if you have a number of years left to work you need to keep tabs on your pension and that it will deliver to you what you are expecting.
Whichever pension you are in you will receive an annual benefit statement, this should act as a trigger to you to review your options, it will show you how your pension pot is performing and whether you need to review your investment options, contribute more or even set up an additional pension.
The Pensions Advisory Service warns that many people only look at their pension as they come to retire, by which point it is often too late to take action!
If you’re confused about any aspect of your pension, the rules more generally or how your own retirement will shape up then as always we are here to help.
Please contact our office to arrange a FREE initial consultation.