Reviewing your pension

Why you should review your pension plans regularly

Imagine you were starting out on a long car journey. You would make sure you had the address for where you wanted to go, buy your refreshments for along the way, and get your favourite radio station on…

Then you’d hit the road.

But you wouldn’t expect to get there without checking your sat nav to see where you were, and the route you needed to take to get to your chosen destination would you?

All sorts of things can come up along the way and affect the journey –  road closures, traffic jams, a brand new high speed motorway, a couple of extra passengers – and your path to retirement is no different.

You should review your pension plans regularly, and ideally make sure you at least do this around ten years before you retire. But even if you only have five years until you hand in your work boots it’s still worth making sure that your pension fund will live up to your expectations.

Here’s some good reasons why it’s worth making time to review your pension…

1. You might be able to save on fees

The pensions market has changed considerably over the last 20 years or so, and if you are on an older style plan, you might be paying over the odds in fees. Some older plans have annual management charges (AMCs) of more than 1% annually and ongoing monthly policy fees, and whilst some come with valuable guarantees, it’s worth checking that yours still represents good value for money.

2. Do you know how much you will need to maintain your lifestyle?

You may have set up your plan pre-kids, or before you bought the second home in France. Plans change over the years, and your income needs in retirement can change too. It’s important to know that your pension funds can give you a stress-free retirement, and that they can live up to your expectations in real terms. Cash flow modelling can help you forecast what you need, and whether your pension plan is on track.

3. Track your fund’s performance

It might not just be your lifestyle that has changed, since you started your pension. The funds you chose might have been hot tickets when you started paying in, but they may be lame ducks now. If your funds aren’t doing as well as predicted it might be worth doing a pension transfer or consolidating funds now.

4. Think about risk

The amount of risk you are willing to take with your cash might have changed since you started your plan, and the realities of an approaching retirement hit. You should review the growth you need, and the risks you are willing to take every couple of years ideally.

At Amethyst we can help you make sure your plans are still fit for purpose and review your pension. Get in touch with one of our specialist financial advisers and we would be happy to help you plan for your future.