‘How could Pensions simplifications, turn out this way, there is a need for quality advice and it start’s here’
From 6th April 2006, the Government of the day, heralded ‘pensions simplification’, some promise, as it proved quite the opposite. A raft of ongoing legislature provided only a web of complexity, even so called ‘pensions freedoms’ added a veil of confusion about what pensions were ultimately intended for!
Pensions are of course there to provide a dependable retirement income for life and the recent rush to exit final salary pension schemes compromises potentially the value of those guarantees. Naturally, it may be right to give up promissory benefits for flexibility, potentially better death benefits, and other reasons, but never under-estimate the value of what are by and large guaranteed benefits.
Over the years, it’s likely you have worked in different places and collected a number of different pension arrangements. Consolidating these can be a good course of action to take, perhaps reducing overall charges on the plans, but being able to synchronise a common investment strategy is a powerful argument. Bringing plans together though has to be thought through, as some legacy type arrangements have valuable guarantees attaching, that would be lost on transfer, so it is not always the best path to follow.
Expert analysis is important, as suggested above pensions have become very complex. Putting that to one side, they are generally investments with a tax wrapper and it is also about maximising those investment returns, within your risk tolerance.
Whilst it’s never too late to start a pension, it’s best to start early. Future Life Capital carried out an analysis that showed a 25 year old, starting pension contributions, would accumulate around double the fund, compared to that which a 40 year old would achieve. This is based on a term, through to State Retirement age of 68.
Making private provision, for your future is important, don’t rely on the State to provide for you’
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