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

EDP Norfolk - - YOUR MONEY -

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.

ABOVE:Are your pen­sion funds be­calmed?

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