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 in a pension transfer, but also save money.
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.
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.
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.
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.
To get free, impartial advice on transferring your pension, contact us today on 0808 164 2664. Alternatively, to find out more about Pension Works, click here.
This can be found on your payslip, P60 document or letters about tax, pensions or social benefits.
If you have (or have had) a pension that is described below then we can potentially carry-out a Pension HealthCheck.
Defined Contribution Pensions
These are ‘Pot of Money’ pensions where the benefits provided take into account the value of the fund at retirement. They can be personal pensions or Occupational Pensions. There are no guarantees as to what pension will be provided. This will be a reflection of contributions made and investment growth.
Defined Benefit Pensions
These offer the promise of a guaranteed pension at retirement which reflects the length of service with an employer. It will be based on either the Final Salary or Average Career Salary of the employee. Providing the company is still in existence, there is no investment risk for the pension receiver. This type of pension is becoming less frequent.
This is a generic term for pensions that are not workplace schemes.
Group Personal Pensions
Employer-sponsored schemes – each member has a personal pension plan, and their contract is with the pension provider. The employer’s role solely is to select the scheme provider, decide if there should be any restrictions on fund choices and take contributions from the employee’s pay and forward them with employer contributions to the pension provider.
A private pension arrangement or personal pension is taken out by a sole-trader or self-employed worker.
State Earnings Related Pension (formerly Graduated Pension and subsequently State 2nd Pension or S2P) was an additional element of State Pension for employees. The amount of pension was linked to the employee’s salary. SERPS was abolished in 2016 when the flat rate State Pension was introduced.
Private pensions are contracts between the pension member and an insurance company or another pension provider.
These are personal pensions where the member has a much wider choice of investments, including commercial property and single company shares.
Personal Pensions with a set of rules that impose amongst other things a maximum annual management charge (AMC), low minimum contribution levels (£20 per month) and an appropriate Default fund.
Private pension linked to an employer’s Defined Benefit Scheme but separate from the Scheme’s internal Additional Voluntary Contribution (AVC) arrangement – largely defunct since the rules were eased several years ago, allowing people to contribute to both personal and employment schemes as they wish.
Money Purchase Pensions
This is another name for Defined Contribution Pensions.
Unfortunately, we are unable to help clients who currently work for or have a pension from one of the following:
If you are unsure about the type of pension(s) you hold, please contact us on 0800 756 1288 or email firstname.lastname@example.org