Is your transferred pension drifting?
With advantageous pension transfer values on offer, many Defined Benefit Scheme members took the decision to move their pension savings to a personal pension. However, there are potential dangers ahead, says Carl Lamb
The last couple of years have been an interesting time for those who belong to a ‘Defined Benefit’ (DB) pension scheme. These are workplace schemes such as in the public sector and larger businesses where the value of your retirement benefits depends on your salary and length of service.
Since pension rules were changed in 2015, personal pension scheme members have enjoyed more flexibility in the way they access their pension savings. DB scheme members also found that the schemes were offering high transfer values, making the prospect of a transfer more attractive.
We’ve advised a number of clients on this area. In many cases we’ve recommended that the member stays in the DB scheme, because we have not been able to identify good reasons to transfer. However, many thousands of DB scheme members across the UK have transferred and now face the need to ensure that their funds are carefully managed to achieve the growth needed to meet retirement objectives.
Sadly, some of those who transferred are now finding themselves drifting without ongoing advice to ensure their pension remains on track. This may be because the firm who provided the original transfer advice is not offering ongoing advice or has ceased trading. Others are finding that their new pension investments are not performing as well as expected.
Personal pensions rely on investment performance. This is where an independent financial adviser will help: we look at your scheme and work out how you can meet agreed objectives without taking a level of risk with which you are uncomfortable.
Choosing a portfolio of investments is only the first step. It is hugely important that the portfolio is reviewed and adjusted periodically to ensure that its performance is on track to meet your objectives. We are discretionary portfolio managers, which means that our clients’ portfolios – whether they take the form of stocks and shares or a portfolio of funds – are actively managed as markets change.
Your retirement should be a happy time, free from money worries. If you have been cast adrift by the people who executed your transfer or are unhappy with the investment advice you are receiving, it may be time to get an alternative view. N
The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. The tax treatment of investments depends on individual circumstances and is subject to change. Almary Green and Smith & Pinching are Chartered Financial Planners. If you would like a no cost exploratory review to discuss your retirement planning with an adviser from either Almary Green or Smith & Pinching call today on 01603 789966 or email en[email protected]ing.co.uk.
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