Take the time to sort out your pension for this year’s Pensions Awareness Day

14 September 2020

Pensions Awareness Day, which falls on 15th September 2020, aims to promote the importance of pensions and saving for the future. While sitting down and sorting through your finances might not be the most appealing prospect, ignoring your pension could be a catastrophic financial mistake, as Tilney’s managing director Jason Hollands explains.

“When it comes to naming the simple pleasures in life, evenings spent studying pensions documentation won’t be high up the list for many of us. Indeed the world of pensions can be especially confusing as it littered with technical jargon that can be hard to navigate. Do you know the difference between a defined benefit and money purchase scheme? The value of the Lifetime Allowance? The difference between flexible drawdown and an annuity, or between a SIPP and a SASS? The list of gobbledygook goes on.  

“Confusion and disinterest in pensions means that around one in five people are estimated to end up literally “losing” at least one pension. This is typically a result of forgetting to notify pension providers and former employers when they move address and in so doing they lose trace of both the value of their pension pots and where they are invested. That can mean enduring years of disappointing performance that could have been remedied with a bit of attention.

“While studying your pensions every now and then might not seem a thrilling prospect, not taking an interest in them could be one of the biggest financial mistakes you make. In many cases these pots of money, which are accumulated either through your workplace or through personal pensions, can amount to the most valuable assets you own after your home. And with the State Pension only providing a very modest level of base line income, the value of workplace and personal pensions and their performance is going to be critical in determining whether have you have a financially secure retirement or a very frugal one.

“If you haven’t previously taken a close interest in your pensions, this urgently needs to move up your priority list. While for younger people retirement may seem like a far off prospect that needn’t be considered for many years, the reality is that the earlier you get a solid pensions savings plan in place, the better the chance you have of achieving a retirement that will enable you to live in financial security.

“So, where should you start when it comes to sorting out your pensions?

“The first step is to track down your pensions. This will enable you to get a clearer picture of where you are at, both in terms of the overall value and knowing where they are invested. It may make sense to consolidate them into a single plan where it is easier to keep an eye on things. However, before transferring a pension it is vital to make sure that you are not going to incur excessive costs or lose important benefits in the process

“While pensions can seem complicated, the value of a pension when you eventually retire will ultimately depend on three things: the amount contributed, the length of time it is invested and how well it performs. A financial adviser can help you understand whether you are on track to achieve the kind of lifestyle you would wish based on the current value and the level of contributions, and identify whether you need to put more in or improve the choice of investments held.  Pensions may not be a bundle of fun, but getting help and sorting them out will give you peace of mind as well as a chance of a better retirement.”

About Tilney

Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years. Our clients are private investors, charities and professional intermediaries who trust us with over £24 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.  We have won numerous awards including Wealth Manager of the Year, Best Discretionary/Advisory Wealth Manager, Best Low-cost SIPP Provider and Best Investment Platform 2018 as voted by readers of the Financial Times and Investors Chronicle; Best Advisory Service in the 2015 City of London Wealth Management Awards; and Investment Award – Cautious category in the Private Asset Management Awards.

Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.