When you have a mix of pensions from different past occupations.
You have reached age 47, and have worked for years in say the printing and packaging trade, for a handful of different companies. You suddenly realise that even with your ambition to keep working until you are 70, you are over half way through your working life.
The regular packages that come through the post, those ones you glance at, but quickly send to your Out Tray, containing the difficult to comprehend pension statements of the FIVE different pension schemes you seem to have, are now starting to become a tad more important to you.
Because you realise a couple of things.
One is you might not work to age 70. You may get laid off in a horribly unexpected recession, you may suffer ill-health or, even possibly, you might change your mind and decide after all, you want to enjoy your time with your family.
Two, whatever age you retire, you also note how many people you are bumping into day after day who are in their 90s.
It dawns on you that either by choice or not, you have a very high probability that you may be retired for quite some time. And you want to have a decent income when you retire.
Those pensions are now a serious factor.
Because they represent, if not 100%, then certainly a very high percentage of your future retirement income.
And you just know that better managed, better cared for pensions, are likely to produce a higher income than ones that are left to do what they will.
How do you start to work out what they all mean?
One is a personal pension, one a stakeholder pension, two are old “occupational company schemes” and one seems to be something to do with opting out of the second state pension – but you don’t really understand any of them.
How do they work, what are they worth, which of the five Company’s ‘managing’ them are doing a good job? What will they grow to in the future? Are they performing well, in the right funds, what risks are involved, when can you retire?
What about those things you have heard about the new pension freedom?
What happens if you die before retiring, or what happens to them if you die after retiring?
How are they taxed, what flexibility do you have, what options, can you do better by changing something?
You can start to suss all this out yourself – good luck.
Or you can seek out advice, quality independent advice, to help you answer these questions.
Is this worth it?
Put it like this, the future difference in income for a person aged 47 today, by the time they retire, can be huge between a well-managed, well-structured pension/retirement strategy and a bad one. Huge. Tens of thousands of pounds in some cases.
People sometimes worry about the cost of advice – well, it is perfectly reasonable to suggest, that the cost of not getting good advice can be far, far more expensive, because if good advice can help you with a great ongoing strategy the difference in future income could easily outweigh any costs of advice by a substantial factor.
Don’t leave old pensions idle, make sure they are working for you, because it is your retirement and your future pension income that is at stake.
Our Independent Financial Advisers are very experienced in this area and can undertake an initial free review of your various pensions. The starting point is to get a better understanding of what you’ve got.