It has been estimated that there could be 1.6 million unclaimed pension pots out there, worth £19.4 billion, which have either been lost or forgotten. That’s the equivalent of nearly £13,000 each, which in the current cost of living crisis, could go a long way to improving your retirement.
Research commissioned by the Association of British Insurers (ABI) has found that although the majority of people think about telling their GP or dentist when they move house, very few think about telling their pension provider about their change of address. As a result, as many as 1 in 30 people could have a pension they didn’t know they had. That’s why we’re supporting the National Pension Tracing Day on 30th October. To make sure that you don’t lose out, you should check the whereabouts of all of your pensions and claim back any that may have been misplaced. If you’ve moved house or changed jobs, you could have an old pension waiting to be found. The first step to hunting down your lost pensions is to look through any paperwork that you might have. Hopefully, you’ll be able to find either an annual statement or the starter pack you received when you first joined. Failing that, you should look through your old employment contracts or payslips for any signs of pension contribution deductions, paying particular attention to details of the scheme administrator or pension company holding your money. If you’re not able to find any paperwork, then get in touch with your old employer. Explain why you’re contacting them and ask for the name of the company’s pension provider at the time that you worked for them, together with their contact details. Alternatively, you could use the Government’s free Pension Tracing Service. Please note though that the service won’t be able to give you any values or plan numbers, but it may be able to help you find contact details for your pension. Finally, once you’ve found your pension and reconnected with your provider, you’ll want to review the plan to make sure that your investments still match your attitude to risk and objectives. You should also check what fees you’re paying, what the scheme rules are around your retirement age and how you can access your plan. If you are looking for expert financial advice to help you with your pensions and retirement planning, please do not hesitate to contact us for an initial no obligation consultation at our cost. A pension is a long-term investment not normally accessible until 55 (57 from April 2028). Your capital is at risk. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. Perhaps now more than ever, it’s sensible to review your pension, and at Podium Financial we’re seeing an increase in clients contacting us who find themselves in one of three situations with their retirement plans following the pandemic.
1) Your retirement plans have slowed down Your retirement date has been pushed back. You’ve decided not to retire at this time as you are unable to enjoy retirement because celebration events (such as dream holidays) are not possible. How I can help you
2) Your retirement plans have speeded up Your retirement date has been moved forward – possibly outside of your control due to redundancy. You could be under pressure to access your pension earlier than you planned or want to. How I can help you
For the first time you have found yourself wanting to know when you can retire. You are suddenly motivated to sort out your retirement plans and get them into shape. How I can help you
Making informed decisions sooner rather than later could make a big difference to the quality of your retirement, and although retirement planning can be complex, Podium Financial are here to make sure that your retirement plans are as good as they can be. If your pensions can be improved, we will explain how and discuss the next steps with you. We offer a completely independent advice service without restriction or bias. This means that as a fully independent financial adviser, we are able to research the whole of the market and select the most appropriate products and services to meet your needs. A pension is a long term investment not normally accessible until age 55 (57 from April 2028). The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Retirement is a chance to do more of what you enjoy, whether that’s travelling, spending more time with family or taking up exciting new hobbies. You might decide to continue working for a while, possibly part time, or your priority may be to help the next generation, perhaps by contributing to education costs or providing help to get onto the property ladder.
Whatever plans you have for your retirement, the introduction of pension freedoms in April 2015, means that you now have more options than ever over how to access your pension pot. Whilst the range of options and increased flexibility has never been better, it’s become even more important to make the right decision and choose the best option for you. Make the wrong decisions and you could be spending your retirement struggling to make ends meet. You can usually take your pension from age 55 (57 from 2028), although the longer you leave your money invested and continue to pay into it, the higher your income could be when you do eventually choose to take it. Typically, up to 25% of your pension can be paid to you completely tax free, after which withdrawals are subject to income tax. The tax-free amount can be taken as a single lump sum or as smaller regular sums, where 25% per cent of each withdrawal is tax-free. You no longer have to use your pension fund to buy an annuity, although many people still do, as an annuity guarantees a regular income stream for life. The amount of income you receive will depend upon a number of factors including the value of your pension, your health and the options you choose. Once set up, an annuity usually can’t be changed or cancelled, so it’s important to shop around and choose your annuity options carefully. Alternatively, you could consider income drawdown which is one of the most flexible ways to access your pension. With this option, your fund remains invested and you’re in control of how much income you take and when to take it. Many people are attracted to drawdown as the flexibility allows them to draw an income without committing to an annuity. In addition, in the event of death, any remaining fund can be passed on to your loved ones, often tax free. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future. You should also take care when drawing more than your tax-free cash amount, as this will then trigger the money purchase annual allowance. This effectively reduces the amount that can be paid into your pension with the benefit of tax relief from £40,000 to just £4,000 per year and could therefore have serious implications for your retirement plans. Unlike an annuity, income drawdown doesn’t guarantee an income for life, so this option carries more risk that your money might run out before you do. It is also important to note that as your pension fund remains invested, you will need to give thought to an appropriate investment strategy and the level of risk that you are comfortable taking. The value of your pension funds (and any income from them) can go down as well as up. Past performance is not a reliable indicator of future performance. There’s clearly a lot to weigh up when considering your ideal retirement and how best to draw your pension. If you don’t feel confident with all these complex decisions, then please don’t hesitate to contact us. We can help you decide which option or combination of options will be most suitable for you and your retirement journey. |