Should I review my pension plans?

It’s worth reviewing your pension plan at regular intervals to make sure that the funds you have chosen are still on track to provide the income you need for your retirement.

Here are some of the key questions you need to think about:

How often should I review my pension?

Firstly, you should think about whether your circumstances have changed, and whether this might affect your potential income and expenditure post-retirement. For example, maybe you have paid off your mortgage, downsized, divorced or have children in Higher Education?

It’s advisable to review your pension scheme and retirement plans every 5-10 years, and definitely around ten years before you retire.

Even if you only have a few years left of work, it’s still worth making sure that your pension pot will perform the way you need it to, as small changes can make a big difference.

How much could I retire on?

You should think about how much you will need to live on, and how much your pension funds are projected to pay out. The State Pension isn’t likely to be enough to support most people, and may change by the time you reach retirement age.

A financial adviser can help you plan for the future and determine the amount of money you need, as well as look at your pension scheme to check that all is in line with your expectations.

Can I reduce the charges on my pension?

Charges cover the cost of managing your scheme, but pension products have changed over the years and it’s possible that by changing your pension product you might be able to reduce the charges you will be liable for when you claim your pension.

It’s also worth looking at your pension charges, because whilst the performance of your investments can go up and down, you will have to pay the charges regardless. So, if your pension investments aren’t performing as well as expected it might be time to change your pension product.

Has my attitude to risk changed?

Your attitude to risk might vary throughout your life. It can depend on lots of things, such as how financially secure you are, how long you have until you retire and how much growth you would need to achieve your investment objectives.

It’s a good idea to look at your pension investments periodically and make sure they are still aligned to your risk profile.

How much tax will I pay?

If you do nothing else when reviewing your pension, it is important to consider the tax implications of your current pension plans.

It might be a good idea to talk to a financial adviser to see if there are tax efficiencies you are not aware of, and to make sure you don’t get any nasty surprises from HMRC when you retire.

For help and advice with your pension and retirement plans, get in touch and Amethyst IFA will be happy to help.