You might have arranged a loan, set up a mortgage, or even set up your own business without any help from a financial adviser. It’s tempting to take that approach to pensions – after all, retirement planning is a personal decision. However, for many people, using the services of a pension adviser can be not only helpful but also save money.
What they can do:
A pension adviser will look at your entire financial situation. They will consider not just your pension, but other assets you might have, such as ISAs and other investments. They can, therefore, give their advice based on detailed knowledge.
They also know the market well. Retirement planning is what pension advisers do – all day, every day! They will be up to date on any industry changes, not only in what different providers might offer but also any government law or regulations that affect the market plus tax thresholds, that might otherwise catch you out.
Why use them?
A pension transfer is not a single transaction. Because of its importance, moving pensions is not like transferring money to a different bank account. A pension adviser will perform a pension assessment and give their advice. If needed, they will chase up pension providers. Pension transfer can be complicated, especially if you have multiple private pensions. A pension adviser can help to complete the process as quickly and efficiently as possible.
Do I have to?
If you have a defined benefit pension or a final salary pension worth over £30,000, you are legally required to take financial advice. Even if this isn’t the case, some providers insist that, for your protection, you seek independent financial advice before requesting a pension transfer.
If not, then technically you can sometimes move your pension yourself. This is tempting if you want to save money. However, a pension adviser can save you much more money in the long run, by pointing you towards the most suitable deal for you. Finally, they can give you peace of mind. It can be easy to fall prey to a scam or to lose money by investing in a risky fund with fantastic returns that seemed a good idea at the time. Most pension advisers are backed by the Financial Service Compensation Scheme, which offers you much more protection should your pension company fail.
What they won’t do:
An independent financial adviser, regulated by the Financial Conduct Authority (FCA), is just that: independent. They aren’t attached to any company. Being independent means they have no vested interests, so they can search the whole of the market to find you the most suitable deal and don’t earn a commission from a pension provider. They shouldn’t pressure you to sign up to anything, and the advice given should always be in your best financial interests. If it turns out that your current scheme is the best for you, their recommendation will be to stay put.
If you are looking for pension or retirement planning advice, choosing a pension adviser that is authorised and regulated by the Financial Conduct Authority like Pension Works, should be your first step. They can analyse your retirement funds and make recommendations that could help you reach your retirement goals.