The average life expectancy in the UK is rising, meaning that people are in retirement for much longer. Many people do not know how much they will need for their retirement and whilst many have investments, one in four adults are at risk of losing their share of £37bn in unclaimed pension funds. We can help you in ensuring you will have enough income to deal with retirement, so read on to find out what can be done,
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What support do the government offer?
The Government’s Pension Tracing Service allows you to contact whoever has administered your old pension plans but will not tell you how much it is worth. The best method of using this service is to first note down all the pension pots you think you have lost track of and have your national insurance number ready. You can then begin searching, using the tool to identify the administrator’s contact details, allowing you to get in touch and track down the pot. Remember, the tool does not feature all pension plans so all is not lost if you cannot find yours.
How can I keep track of pensions?
The easiest way to maintain a good record is to notify your pension provider of any changes to your employment situation. It is also important to ensure they are aware of any changes to personal details such as email address or phone number.
If you have a defined contribution pension, you can put your pots into one place, making it easier to manage savings. This type of plan is when both your own and your employer’s contributions are invested and then proceeds are used to buy a pension/benefits at retirement. This type of pension is common following October 2012’s auto-enrolment initiative.
Defined benefit and final-salary pension plans give you a set level of income, which is based upon your annual salary when you retire – meaning it is not usually beneficial to condense these into one pot.
Many employers will offer incentives for transferring final-salary pensions, but you can often be left worse-off, meaning seeking expert advice is essential before making any decisions. You can always merge pensions into one scheme, yet exit fees apply and increase the longer you wait.
How can technology help me?
As of January 2020, the Government have added new rules to the Pension Schemes Bill. This is an online service that allows you to view information about multiple pensions in one location. This service can collect and display information from multiple sources and can be accessed anywhere at any time. These pension dashboards should link to the Government’s Pension Tracing Service puts you in full control of any of the pensions you may have had during your career.
Should I be careful?
Yes – since there is a lot of data readily available online, many fraudsters have begun to attempt to scam retirement savers out of their well-deserved pension pots. In 2018, the Financial Conduct Authority reported that on average, pension savers had been scammed for £82,000 – which takes 22 years to accumulate.
Some of the scams that have been reported are:
- Exotic investments
- Free reviews
- Early cash-in offers
Never be rushed into deciding when you are condensing pensions into one pot, make sure it is efficient and reliable for you. It is good practice to reject any unexpected pension offers, online or through telephone calls and ensure that the pension provider you are dealing with have a good reputation.
How should I plan my pension?
Planning a pension can be difficult, and we can help with this at JDA. It helps to know that starting your pension as early as possible will give a better chance of a comfortable pension income when you retire.
You also have the choice to be hands-on with your pension funds and how they are invested. If you are keen to invest, make sure that there is a balance between high and low-risk exposure. Overall, it’s often a good idea to consult a professional before making any important decisions.
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