Almost 40% of persons aged 20 to 35 don’t have a bank account, leave alone a retirement plan. Most people today are moving with the ‘YOLO’ trend, forgetting that they might end up seeing their great-grandchildren. With the years rushing and as sunsets come and go, you need to have a reliable retirement plan by saving into a pension1 scheme.
However, since these plans are complicated, you do need to seek independent pension advice from a financial expert. The pension advisor you choose will guide you on what you need to know and have before you decide on the best plan for you.
That said here’s a brief guide to pension advice.
Why You Need Pension Advice
Pensions are saving that you make to support yourself in the future. Reliable pension providers offer these plans, and they feature various options. You can receive a pension scheme from your boss, or even past employers – the workplace pension schemes. You can also set a pension plan up for yourself depending on your needs, the personal pensions2 and those offered by the government – state pensions.
However, before you take a pension plan, you need to seek financial advice from a reliable pension advisor who’ll walk you through the whole process. They’ll also help you figure out the best option and guide to investing in the best schemes.
With the myriad of pension advice online platforms though, it can be daunting trying to figure out where to find the best pension advice. Well, here are some of the reliable sources, based on their ratings and reviews.
Where to Find Pension Advice
It doesn’t matter if you’re thinking about opening a pension pot, looking to transfer your pension scheme or are close to retirement and considering various options. You can get reliable, straightforward and free pension advice from websites like the Pensions Advisory Service.
You should, however, ensure that you’re fully clued-up when you’re making pension decisions and seek further assistance if you need it. If you’re particular about free advice, be sure to consult a certified independent financial advisor (IFA) who’ll walk you through everything you need to know. If you want to transfer you defined benefits or defined contribution pensions worth over £500,000, then the IFA will be your best bet.
The Citizen Advice Helpline supports those with various issues in retirement. For instance, in 2013/14, more than 150,000 people, based on the helpline’s statistics, requested for assistance with pension issues.
Locally, Citizen Advice Service is popularly known as the number one pension advice service platform when it comes to assisting people in figuring out their retirement investment option and making informed decisions that are best suited for them.
Yes, you do. An independent financial advisor will help you figure out the best retirement planning scheme for you. They’ll evaluate your finances, personal circumstances, your objective and how you feel about financial risks. It’ll assist them in making the best recommendations on retirement income products like the type of annuity3 you need, drawdowns, and other policies.
You might also benefit from seeking the services of the Pension Advisory Service that’s specifically established to help retirees with their pension issues. Either way, as long as you get the proper guidance, you’ll be sure to make the right choices.
Well, this depends on your advisor. Typically, your pension financial advisor will offer you several payment options depending on the services you need, the extent of the advice you require, the amount of time it’ll take and the size of the assets involved. Some of the fees you can expect are:
- Fixed fee – this caters to the pension advisor setting up an annuity for a set price that you agreed on in advance
- Percentage of assets – if you have an advisor who’s managing your investment portfolio over an extended period, they might charge you a rate of the portfolio’s total value
- Hourly rate – some pension advisors might charge you an hourly rate for specific services (£150 per hour is the UK average rate)
However, in as much as there are various fees, each pension advisor has their charging rate, so you need to ensure that you have a sit down to discuss these rates beforehand. Here’s an estimation of the costs you can expect for typical pension advisor services.
|Advice and set up of £20,000 investment ISA||£600|
|Advice on a £500 a month pension contribution||£700|
|Advice on defined benefit pension transfer (based on a transfer value of £150,000)||£3,000|
|At-retirement advice on £300,000 pension pot||£3,500|
|Consolidating pension pots with a total value of £500,000||£5,000|
You might require a solid pension scheme if you:
- Require security in retirement. If you have limited fixed sources of income, the guaranteed income offered by a defined benefit pension scheme might be appealing
- Intend to stick to the same pension company for the long haul. If you’re planning to work for your boss for over ten years, then it does make sense to participate in a pension scheme. It’s because you’re more likely to become fully invested in the plan, which would, in turn, entitle you to all the benefits that you amass in the scheme
- Don’t plan on relocating to another place. If the job that makes you qualified for a pension plan is location-dependent – for instance, if you work as a police officer or teacher and the state runs your retirement plans, then it might be more sensible to choose a pension scheme since you work in that particular state