The Top Ten issues
You should start to consider your options at least 6 months before you intend to retire. Ideally taking a view more than a year earlier will give you the best chance to plan.
There are so many aspects to consider that they can’t all be listed here but the table below shows the top ten I come across where advice is most often needed
| Pension Type | Aspect | Comment |
|---|---|---|
| Personal Pension | Internet advice | If you believe everything you read on the internet then please go and live in a cave. It will be much safer. There is a reason they always want your contact details. If you are now being pestered by telephone calls about annuities or anything else to do with pension ‘opportunities’ and don’t know what to do then go and see an independent financial adviser. Many independent financial advisers will, like I do, advise you for a fee agreed up front and be willing to receive the phone calls from the internet adviser so that the ‘opportunity’ can be examined on your behalf. If you decide to proceed with ‘advice’ from an internet adviser be aware that you are unlikely to be receiving advice. It will probably be ‘information so that you can make your own informed decision’. This means that they are not responsible in any way. If you can find and check the small print you may also find that the commission charge is higher than the fee. Independant financial advisers providing you with advice will not take commission |
| Open Market Option | Don’t take the pension from the company with the policy. 90% of the time it can be improved with independent advice | |
| Ill health | If you are in poor health, or even just a smoker better rates can be obtained. In very poor health it may be better to leave the money tax-free to dependants or take it all as a lump sum now instead of buying an annuity | |
| With Profits | Older policies, especially pre 1992 may have valuable guarantees built in, but only if you know how to ask the question | |
| Guaranteed Rates | Older policies, especially pre 1992 may have valuable guarantees built in, but only if you know how to ask the question | |
| Buyout Policy (Section 32) | As personal pension | These often have guarantees built in and the tax-free cash may be more than 25% |
| Total Funds exceeding £130,000 | Options available | Drawdown may be an option but advice is needed |
| Director and Executive Pensions | All of the above may apply | If you are not confident about what you have been told by your current adviser seek help elsewhere, or at least ask for a 2nd opinion |
| Company ‘Final Salary’ Pension | Tax-free lump sum | Nice to have but the value you are sacrificing may be worth 3 times the cash you take |
| Basic State Pension | Incomplete National Insurance record | It may be possible to top up your pension by paying voluntary NI contributions |
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