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The advantages of repensioning

Submitted by Manager on Tue, 17/01/2012 - 11:44

A job for life with one company is long-gone now – but the way we traditionally approach pensions has not automatically caught up.

If you have worked for several different employers over the course of your career, you quite possibly have several pensions frozen in different pensions schemes. You might even have your own personal pensions seperate from your employer. There are benefits to bringing your pensions together into one well-chosen scheme.

1. Easier to keep track of your investments  It may seem a long way away, but stashing all your pensions statements in a folder marked ‘later’ is storing up a big sorting-out job for the future. A single pension pot is more easily managed – simple as that.

2. Saving on fees 1  Prudential, Scottish Life, Standard Life and Zurich charge lower fees for members with bigger pension pots.

3. Saving on fees 2  Fees and legislation all change over time so it may be worth switching to a provider with lower charges.

4. More suitable product As the economy and your life changes, your pensions needs do too. If you’d like to reduce your investment risk, or switch to a self-investment, changing and consolidating pension provider is a good option.

5. Protect your investment As your retirement date draws near, you can protect the value of your investment against shar drops in the stock market, using something called lifestyle. This transfers assets into equities and cash and fixed-interest investments. It’s not automatic – so you will have to decide whether to go for it.

Switching to a different provider at this stage will probably be inappropriate, given the short time frame and the charges involved. However, most providers allow you to switch to lower-risk funds within your existing pension investments free of charge. Others allow a set number of fund transfers before applying a fee.

6. Shop carefully  Once you are ready to use your money-purchase pension fund to but an annuity, however, it’s vital to shop around for the best deal. Remember to consider enhanced annuities, for example, if you are in poor health.

7. Get good advice  Now more than ever, it would not be a good idea to make changes to your pension without qualified advice. A good Independent Financial Adviser will be constantly watching changes in the pension market and be able to match you and your requirements with the best investment options out there. Contact My IFM for more details on 0845 0669432

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