Search

Clarke Nicklin Financial Planning

'protecting your wealth and helping your investments grow'

Month

August 2016

Make time to review your pension and take active interest retirement savings

Millions of savers currently spend very little time reviewing their pensions, with more than a quarter of savers admitting to never reviewing their retirement savings, while almost a fifth of those with a pension said they review it less than once every five years according to figures released by Aviva*.

Gender also has a role to play. The number of women who are not engaged with their pension is particularly high; with almost a third saying they never review their savings, compared to a quarter of men.

Most people have no idea what their pension is worth

Worryingly, Aviva’s figures show that only just over a quarter of people think that their current contributions into their company pension scheme will provide enough for them in retirement **. Ask most people what they earn now and they’ll have a pretty good idea, sometimes down to the penny, but most people have no idea what their pension is worth.

The figures show that urgent action is needed to encourage people to take an active interest in their retirement savings. While the number of people reviewing their pension is worryingly low, the research shows that the main thing that does cause them to act is the arrival of their annual pension statement.

Regularly check how our pension is performing

Investment funds rarely continue to perform well year after year, so it’s important to regularly check how our pension is performing. In addition, over time the amount of risk many of us are prepared to accept in our investments typically tends to reduce, to the extent that by the time we’re close to retirement we may not wish to take much risk at all.

The closer you get to approaching retirement, the more important it is to know how your pensions fund is performing. If you wait until your retirement, the chances are you will have no idea what income you will receive, and then it’s too late to make any changes. The longer you have to prepare for retirement, the much greater chance you have of doing something about it and achieving a comfortable retirement.

* Friends Life (now part of the Aviva group) survey of 9,498 people in the UK with a pension, carried out by YouGov (Jan–Dec 2015)

**Friends Life (now part of the Aviva group) survey of 3,618 people in the UK who contribute to a company pension, carried out by YouGov (Jan–Dec 2015)

A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

 

Advice with you in mind…

One of the most important relationships you may ever have is the one with your professional financial adviser. The advice process allows you to assess your financial goals, investment time frame and tolerance for risk, and to monitor these over time. In addition, you can obtain guidance in times of market downturns and personal financial stress, ensuring that your strategy is tailored for your changing needs and circumstances.

Investment choices

With a vast array of products and information available, the thought of wading through them and choosing an investment can be quite daunting, and it can be difficult to find the time to keep fully up to speed with everything that’s going on. An advisor will help you to make an informed decision based on your investment objectives, understand which products are available and select the best options to suit your investment needs.

Extracting information

Understanding the jargon used within the financial industry and extracting the important information can be difficult and time-consuming. They will help you to translate current events, understand the implications of interest rate increases or a change in pension freedoms legislation and how each issue could directly affect you.

Continual reviews

As time passes, both markets and your lifestyle can change dramatically. This consequently means that it is important to keep your investments under continual review so that you can get the most out of them. Anything in your life, such as your age or personal situation, could potentially affect the requirements you have for your investments.

Unforeseen events

With markets constantly on the move and unforeseen events sometimes having significant impacts, the need for ongoing adjustments to your investments can be extremely important, and staying on top of this can be a full-time job which very few of us have time for. Taking responsibility off your hands and putting it with an advisor can help you to feel more confident that your investments are in the most suitable place for your individual requirements.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.

Create a free website or blog at WordPress.com.

Up ↑