Do I Really Need Pension Advice?

The question of pensions has been increasingly on people’s minds recently.  There are a number of reasons for this.

• We are frequently being reminded that the population in general is living longer, so our pensions have to go further. 

• The cost of living seems to be rising daily and this clearly impacts more on the elderly, espcially the cost of fuel.

• There have been a number of high-profile pension scandals recently and this focuses people’s minds on the importance of making the right pension arrangements. 

All this serves to highlight how essential it is to get the right pension advice.

You may be among the fortunate who are part of a good occupational pension scheme.  However, really good schemes are becoming rarer as more and more employers switch from final salary schemes to money purchase schemes.  A final salary scheme is more advantageous for the employee because the amount of the pension is guaranteed, but it carries some risk for the employer.  With a money purchase scheme, the amount you get depends on the performance of the fund, so it provides less security.  If you’re not part of a good scheme, or you’re not happy with the scheme you’re in, you may be wondering how best to provide for your retirement.

So what reasons might you have for seeking pension advice?

• If you need help in choosing a personal pension.  There are an increasing number of these on the market and the providers compete for your business by advertising them in the most alluring terms.  You really need expert advice in deciding which product best meets your needs.

• In some companies, the company pension scheme is optional.  Deciding whether to join it or not, or whether a personal pension would be better, can be a difficult decision – it’s best to take pension advice.  The adviser can help you assess the soundness of the scheme and assess how advantageous it would be for you.

• It could be that your company wants to close down your pension scheme or alter your pension arrangements.  You may need pension advice to help you weigh up your options.

• Remember that if you buy a pension product without taking pension advice, you have fewer rights to cancel.  You also have fewer rights to complain or claim compensation if it turns out not to be right for you.

• If you are considering a Stakeholder Pension, you should look for an adviser who is authorised to offer “basic advice” on stakeholder products.  This would involve reaching a basic understanding of your circumstances, without carrying out a full assessment.

The whole area of pensions really is very complicated.  Unless your requirements are very straightforward, or you know exactly what you are doing, you really owe it to yourself to look for pension advice from a qualified adviser.  This could save you from making an expensive mistake that could affect your whole life!