“I don’t like pensions.”

admin — Fri, 28 Dec 2012 13:00:09 +0000

I wish I had a quid for every time I’ve heard that. Yet, it doesn’t make sense. It’s a bit like saying you don’t like houses or cars.

Because what it actually means is you don’t like your experience of pensions. And there’s a very good reason for that - you’ve probably got a useless one.

Now this isn’t your fault. Not many people understand pensions. They’re not a subject taught in school. Most people get one accidentally when they bumped into “The Man From The Pru”, or stumbled across one when they happened to work for one of the few employers who actually provided a company pension.

But they don’t really get it. Some (but not many in my experience) grapple with “The Annual Statement.” It’s almost impossible to make any sense of this document let alone work out how much you’re likely to get when you retire and most just file it or throw it away.

So, as with anything you don’t understand, you adopt “The Ostrich Approach” and stick your head in the sand.

I’ve heard all the excuses.

You don’t have to worry about this just now.
You’ll look at it later.
You won’t understand it.
You’re not likely to perform any retirement planning because you feel you won’t get to retirement age given the amount you smoke/drink/drive/worry ……………..

But think of it this way. If you have £10,000 in a savings account and every time you looked at it, it was worth less than the £10,000 you put it you’d do something about it, right?

Well, it’s the same thing with a pension. It’s your money that you’re wasting, nobody else’s, and, if you don’t get a grip on it, you’re heading for a pretty lousy retirement.

Taking Control is the Solution.

The solution is actually fairly simple. We’ve devised a simple 4 step process to get YOU back in control of YOUR pension.

Here’s what we do:

We look at the pension(s) you have now
We see whether that pension is actually working for you
If not (which is usually the case) we tell you how we can get it working for you
We continue to look after it so that it continues to work for you – and keep you regularly informed as to how we are doing –

So – you have two choices:

You can either continue to ignore the problem and keep your fingers crossed.

You can do yourself a favour and get some free pension advice and get your pension sorted. After all – your future depends on it.

It’s very simple – all we need is details of your current pension(s) and your authority to get the information we need. Once we’ve done our bit we will explain, plain and simple (after all, we’re Yorkshire folk!) whether you need to do anything and if so, what.

Get control of your pension and your future by contacting us today.

January 2011 Newsletter

admin — Mon, 01 Nov 2010 12:24:59 +0000

The Pensions Advice Centre is a consultancy with a difference. Our emphasis is on helping you safeguard your future and identifying your potential opportunities. Our most popular service is the Pensions Health Check where we can look at your existing pension provision and your requirements for the future.

Time to take action

Total UK personal debt had reached £1,457bn by October 2010, according to figures from Credit Action – more money than the whole country produces in a year and a sum that equates to around £8,500 per household.

Contrast that with the nation’s current savings levels, which have seen the average household save just £949 over the last 12 months – or £2.60 a day. However, in an environment where it has become the norm – and, until recently, all too easy – for individuals to make purchases with debt, changing this ‘enjoy now, pay later’ mentality is going to be difficult.

You may be sure, however, that the coalition government is keen to encourage such a change. Work & Pensions Secretary Iain Duncan Smith has been quoted as saying: “We do not save enough in this country…it is appalling, and changing the culture is critical.” Right now, the main incentives to encourage such saving involve limiting the amount of tax you pay on certain savings products. Certainly, the Government needs to do more if they are going to generate the kind of interest that will push more people to act.

Yet, if there was ever a good reason to start changing our behaviour, it is surely the fact it costs the average household 15% of its net income just to meet its interest payments. That is £2,000, £3,000 or perhaps even £5,000 a year going to lenders that could otherwise be heading into our pockets. Now that really should be an incentive to start saving.

Planning for success
BE REALISTIC ABOUT YOUR LIABILITIES It’s not enough to be realistic about your assets – it is also vital to be realistic about your liabilities. For example, if you have debts outstanding, then you are going to save more money by paying them off (and thereby saving yourself high interest payments) than you are ever likely to make from an investment. These should therefore be addressed first.

You should also make sure you have a readily available ‘emergency fund’ – in case you need to repair the roof or buy a new car. Putting these foundations are in place first allows you the freedom to make the right investment choices and give your family the financial future you desire.

Funding a decent income
Whenever you start thinking about retirement planning, a good place to start is with how much income you think you will need. Generally, few people need as much income when retired as they did when they were working – the mortgage may be paid off, children will have left home and day-to-day expenses should have fallen. However, with the increased leisure time, you may have some ambitious plans for travel or family, and all these need to be considered so you can set some realistic expectations.

Once your own figure has been determined, you can begin to work out where it will come from. For example, the state pension is £97.65 a week (for 2010/11), plus there may be money coming in from ISA investments, rent from property or even some continued paid employment. Moving to a smaller main residence could also release some capital – although house prices can go down as we have seen recently, so it might be a risky thing to depend on if that is all that you have.

Once completed, however, you should have a much better idea of what income you need to generate from pension savings. You may already have started through a workplace or personal pension, and this should be taken into account, but it is likely you will still need to supplement it, and build it further over the years you have left.

To give you an idea, at the best current annuity rates (April 2010), given interest rates are so low, £10,000 of annual income will cost a male aged 65 over £150,000 -with no guarantees. If you are female or would like some inflation protection -or simply wish to retire earlier than that -the cost is even higher. The amount you need to save could therefore be considerable. However, it does not all have to go into a pension plan. If you need or would prefer some flexibility over access to your savings, ISAs can be a useful addition to your plans, subject to your personal tax position.

Thanks to changes in 2006, you can now invest up to 100% of your annual earnings, subject to a maximum of £255,000 (for 2010/11), with various amounts of tax relief available on the contribution, depending on how much you earn -for example, if you earn over £150,000, beware as the Budget has just placed stricter limits you. There is also a maximum limit on the overall size of the pension portfolio you can generate – although at £1.8m this tax year, there are only a few who are affected.

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The contents of this newsletter do not constitute advice and should not be taken as a recommendation to purchase or invest in any of the products mentioned. Before taking any decisions, we suggest you seek advice from a professional financial adviser.

The Pension Advice Centre

“I don’t like pensions.”

January 2011 Newsletter