SPECIALIST

PENSION REVIEW SERVICE

Helping you to undertand how well your pension is performing, where it is invested, and what you need to do to get the income you require.

Our pension review process is designed to evaluate your existing pension schemes in terms of their charges, performance and features.  We will compare your existing pension funds with alternative options currently available from the whole of the market to establish if they are competitive. 

We will also determine your risk appetite and establish whether your pension funds are invested in line with your attitude to risk, and whether your current pension provisions have all the features you require.  For example, many older pension contracts do not have the flexibility to allow you to use your pension like a bank account and to draw fund as and when you require, without moving it to a new modern pension fund.

More often than not, we identify that most people do not save enough towards their retirement.  As a general guide, people should save around 15% of their salary to provide them with a reasonable income in retirement, however everyone has different retirement ambitions and we provide bespoke personal advice to meet your specific needs.

Following our review, you will know if your pension contract meets your needs, in which funds your pension is invested and how it has performed. We will also advise you how much you should contribute into your pension in order to achieve your personal requirements. 

After a review, you will be in an informed position, however, that is just one point in time.  Ultimately, achieving your retirement ambitions will depend on a combination of factors, including investment performance, inflation, the level of contributions and changing pension legislation. It is therefore advisable to have your pension reviewed regularly to ensure you remain on track, and to make any adjustments required.

It is likely that you pay to give your car an annual service even if you are not aware of any mechanical problems.  This is sensible forward planning, you pay for a car service so that your car does not break down, and hopefully always gets you to your destination.  You should do the same with your pension.

Case Study - Meet John

John is 55 years old and has four pensions with different pension providers. John doesn’t understand his pensions or what income they will provide in retirement. John has never really seen the point to pensions, as the paperwork he receives from his provider suggests that he will not receive very much. 

Pension providers are legally obliged to provide illustrations in a prescribed format.  The calculations assume you will buy an annuity at retirement and annuity rates are linked to interest rates, which are historically low.

John has an occupational final salary pension scheme, a paid up personal pension worth £77,000, a paid-up group personal pension from a previous employment worth £58,000, and his current group personal pension in which he only invests the minimum amount.

Having obtained information from all the pension providers as well as a state pension forecast, we explained all the features of his various pensions.

John’s final salary pension is payable from age 65, however if he accesses it early he will incur financial penalties, like most schemes of this type.  We explained that final salary pension schemes provide a guaranteed income in retirement, in John’s case of £6,000 per annum.  This when added his projected state pension of £8,000 per annum gave John a guaranteed income of £14,000 per annum.  Given the guarantees of the scheme, John was advised to leave his final salary pension alone.

John however ideally wanted an income of £25,000 per annum in retirement, leaving him £11,000 short of his retirement ambitions.

Next we reviewed John’s two paid up pensions, John was surprised to learn that these pensions had changed provider several times.  The first one was invested in a ‘with-profits’ fund and after analysing its performance, we identified that it had only grown by 0.5% per annum for the last 6 years.  The second was invested in a default fund, mainly invested in cash and fixed interest, so the returns had also been low.

We advised John to transfer these two pensions into a new cheaper contract, which was expected to generate greater returns and provided the option of flexi-access income drawdown to provide him with income in retirement, something the previous pension contracts did not facilitate.