This year resolve to sort out your U.K pension, or if you have more than one, all of them. For the most part people’s new year’s resolutions have already failed by the end of January. In fact, 80% of resolutions fail before the 12th of January! But what if you could make one resolution this year that would give you many years of happy returns in the future?
Since auto-enrolment, millions more people are now part of a workplace pension. The most common issue we see with these types of pension is that whilst people have paid into them from their salaries, sometimes for years, the majority of people haven’t actually engaged with what happens to their money after that. Many people we speak to don’t know how much is in their workplace pension, have no clue where it’s invested and haven’t given a second thought to what it could be worth when they reach retirement age.
It is worth investing some time to find out these details as it is more often than not the case, that there would be better ways to build that pot of wealth.
Typically, people never drill into the details of where their pension is invested or how it is managed. When they join a pension plan their contributions are usually invested into a ‘default’ fund. All defined contribution schemes have these, and the majority of people just stick with them. However, the uplift you could get from being a ‘self-selector’ and choosing how the pension is invested could be significant. It is also important to make sure the investments are in-line with your risk profile and match your future retirement goals.
Another common issue we see is people who have multiple schemes having worked for a few different companies. Combining these all together into one carefully managed pension can be a huge advantage. Not only can you ensure you have more control over the way the funds are invested and what fees you are paying, but also simply from an administration perspective it makes keeping track of everything a lot easier. Crucially, with regards to keeping track of everything, this especially applies should the worst case happen to you. Rather than your beneficiaries having to deal with multiple schemes the process will be greatly simplified, a massive bonus at a stressful time for them.
Getting your head around your workplace pension could be the best new year resolution you ever make. It will not only mean a brighter future for you, but for your children, and possibly even your grandchildren. If you don’t know where to start, get in touch today for a free no obligation discussion with an advisor.
For more information on U.K pensions, visit the pension section of our website.