Need to speak to someone about your pension but don’t know where to start? Chances are, you’re not alone.
According to The Lang Cat’s 2023 Advice Gap report, 89% of people in the UK have not paid for financial advice over the last couple of years, with trust, confidence and awareness among the main barriers preventing people from taking action.
Our pensions are often the most important savings that we’ll make in our lifetime. However, their complex nature typically puts people off dealing with them – it’s a classic case of when something feels difficult, we ignore it, and inertia rules…
However, given that we rely on our pensions to support us throughout retirement, it’s a good idea to check on them every few years. This way, you can make sure that your finances are on track for the type of lifestyle that you want, and expect later on.
But many of our members tell us that – when it comes to organising their retirement savings – they don’t know where to begin. With that in mind, we’ve pulled together a few starting points to hopefully make those initial steps just that little bit easier.
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
Find out where you stand
When it comes to keeping track of your pension or pensions, the first step is to dig out information from your various pension providers. You may only have one pension provider if you’ve been with the same employer for 20 or more years, or you may have a number of pension pots split across different providers if you’ve changed employers every few years.
By law, each pension provider is required to give you regular updates on the performance of your pension. It helps if you can find and gather the last statements that you received for each pension pot, so that you have a complete list of all your pensions and the various amounts in each. You can find out more about the sort of information your pension statement shows in our guide Your annual pension statement explained.
If you can’t find the information you need – but know who your pension is with, then you should be able to call the provider and give them your National Insurance number and other personal information to allow them to identify you and get the details sent out. It’s also worth checking and updating the address they have on file for you at the same time if you’ve moved house since you last provided your details.
If you’re still struggling to find the details, then the Government has a service that allows you to find the contact details of various providers to trace long lost pensions at Gov.uk. It may be time-consuming, but it’s worth taking the time to do this, as you don’t want to potentially lose out on thousands of pounds left sitting in a long lost pension somewhere. You can find out more about how to track down any missing or forgotten pensions in our article Tracing lost pensions.
Can I get free pension help?
You will have to pay if you want pension advice from a financial advisor, but you can get free pension guidance from the Pension Wise website. It was set up by the Government to offer free and impartial guidance to people who have a personal pension scheme.
If you are aged 50 or over and have a defined contribution pension, you can book a free telephone or face to face appointment with them, to help you make sense of your options. This is almost always worth doing as a free starting point to help you on your way.
Do I need a financial advisor for my pension?
If you’ve built up even a modest sized personal pension pot, it may also make sense to consider using a financial advisor who can offer you more personalised support and help you plan for your retirement.
The downside to using a financial advisor is that there are fees involved, but these are often outweighed by the benefits of getting good personalised advice. Find out more about this in our guide The value of financial advice.
Different firms can charge in different ways, so it’s important to get an idea of the costs upfront. Thankfully, since 2011 the Financial Regulator (the FCA) has made it a requirement for financial advisors to clearly state what the fees are at the first meeting – this way, there’s unlikely to be any nasty surprises further down the line.
Word of mouth is always helpful when looking for advisor recommendations. Many advisors focus on building their reputation locally, so in the first instance it’s worth asking trusted friends and family who they have chosen to advise them on their money and if they would recommend using them.
Paying for pension advice
If you don’t have savings available to cover advice costs, you can withdraw £500 (tax-free) up to three times from your pension to pay for professional pension advice. You can find out more about this in our guide What is the Pensions Advice Allowance?
Many advisors also offer an initial free consultation, which gives you a chance to try out their service and ensure you are happy to have a continuing relationship before paying for anything. With many financial advisors offering this free consultation it can make sense to meet more than one – so you can make a comparison and see who you have the best rapport with – to ultimately help you decide who you trust to give you the best advice for your circumstances.
When to see a financial advisor?
If you’re not sure what to do with your pensions, perhaps because you’ve saved into lots of different schemes over the years and are considering consolidating them, or perhaps you want to know which pension funds to invest in or how best to start taking your pension, you might decide you want a financial adviser to talk you through the available options.
They can manage your pension on your behalf and let you know what you need to do to ensure you’re on track for retirement.
Another benefit of professional financial advice is that if you’re recommended a financial product which turns out to be unsuitable, you may be able to claim compensation for ‘mis-selling’. Bear in mind, however, that if an investment you’ve been recommended performs badly because markets fall rather than rise, you won’t be protected against losses.
If you want to manage your financial affairs yourself and are confident going it alone, then you might decide you don’t need to pay for financial advice. Find out more about when you might need advice on your pension in our guide When should I get pension advice?
Do I need a financial advisor to draw down my pension?
You may decide to seek professional advice if you’re not sure how to draw an income from your pension. There are several different options to choose from, and an adviser can help you choose the right one for you based on your individual circumstances. You can find out more in our guides Your pension options at retirement, What is pension drawdown and how does it work? and Annuities explained.
However, you’re under no obligation to seek advice, and you may already have an idea of how you’ll draw an income from your pension. Take a look at our article How to choose the best pension drawdown provider if you’re trying to work out which drawdown provider to go with. The only time when you are legally obliged to seek pension advice is if you’re planning to transfer out of a final salary pension. Learn more about this in our article Should I transfer my final salary pension?
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
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