Review your personal pension plan before it’s too late!

Year after year, surveys consistently show that the number one concern for most people approaching retirement is the fear of not having enough money to maintain their lifestyle during this period.  According to the LV State of Retirement Report, published in 2012, 58% of those set to retire within five years have become more concerned over the last 12 months about their financial situation and their level of savings for retirement.

This sentiment is one frequently encountered by the Retirement and Investment Solutions team. Time and time again, we meet individuals who are simply not prepared for their retirement. Instead of reviewing pension plans and keeping up-to-date with their finances, many are sticking their head in the sand, accepting what’s done is done. This doesn’t have to be the case.

Below are a handful of scenarios we experience on a daily basis. Unfortunately, sometimes it’s too late to make a difference. However, asking for advice and reviewing your personal pension plan on a regular basis can, in most cases, positively affect your retirement income.

1. If only he had reviewed his pension plan much earlier!

A gentleman approached Retirement and Investment Solutions wanting to know whether or not he could afford to retire later this year, when he would be 65.  As part of the service provided by Retirement and Investment Solutions a letter of authority was sent to the gentleman’s Pension Provider.  He took out a personal pension plan in the early nineties, with London Life, which is now owned by Phoenix Life and has been invested in a ‘With Profits Fund’ since the outset.  This is supposed to be lower risk strategy which was designed to pay out an annual bonus.  However, this particular plan has not paid a bonus since 2003, i.e. 10 years of no growth!  

Unfortunately, in this case, it was not financially viable to move the gentleman to a more modern and cost effective plan with only months to go.

The good news is that by shopping around on the Open market and taking consideration of his health and lifestyle we are able to provide a higher income than if he took the benefits from Phoenix Life.

2. Be careful what you sign-up for!

A lady approached Retirement and Investment Solutions and took advantage of the Free Retirement Review.  She had a Canada Life Personal Pension, which was taken out in 1997 and has been paying regularly each month into her plan and increasing the amount each year to keep pace with inflation.  Unfortunately, what she did not realise was that 2% of each contributions was deducted at outset in initial charges and the pension  plan deducted a further £4.44 per month for a “policy fee” plus annual management charges on initial units of 4.75%, annual management charges on accumulation units of 1.25% and additional charges if she wants to switch funds. To make it worse, every time she increased her regular contributions, there were additional initial units purchased, which were being charged at 4.75% per annum.

Retirement and Investment Solutions advised the lady to cancel her direct debit to Canada Life immediately.  We then consolidated her various old plans into one modern contract at a lower ongoing cost, with improved investment management. The lady’s regular contributions were redirected into her Employers Group Pension plan by way of Salary sacrifice, which will also reduce her National Insurance bill.

3. Without advice, he would have lost one third of his total pension fund in penalties!

A client of Retirement and Investment Solutions came in to see an advisor in July 2012. The gentleman had decided that he wanted to take the benefits from his personal pension plans. He accepted that the fund values were not brilliant, but did not know until advised by Retirement and Investment Solutions, that by delaying taking the benefits by 5 months, until the plan’s normal retirement date, i.e. age 65 in this instance, the penalty that applied in July 2012 disappeared on his 65th birthday. 


Retirement and Investment Solutions cannot stress enough the importance of reviewing your pension plan on a regular basis. Don't leave pension arrangements and financial affairs until just before your retirement.  You may well be surprised to learn how little your investment fund is worth and how little a pension payment it would provide.

If you are not confident that your investments are performing as well as they could, or you are unsure about your pension and looking for advice, Retirement and Investment Solutions can provide you with a Free Retirement Review to help you avoid any of the above and set you on the right path to a more secure retirement.

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