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1. Lack of ongoing advice
The sad fact is that many pensions are not regularly reviewed by the advisers that have set them up for you. The problem is that investment funds rarely continue to perform well year after year, so to get the best out your money, it’s important to regular check how your investment is performing. Many default investment funds have not performed well over the years.
2. Review how much risk you are taking
When you first took out your pension, your adviser probably advised you on how much risk to take with your investment. However over time the amount of risk we are prepared to accept in our investments tends to reduce, to the extent that by the time close to retirement we may not wish to take much risk at all.
Over the last 10 years, the amount we all pay in charges for our pensions has come under the microscope. For some pensions arranged over the last 20 years, the charges can be considerably more than you would be paying for a more modern pension. The more competitive the charging, the more of your money that is invested for you.
4. You are getting closer to retirement
The closer you get to retirement the more important it is to know how your pension fund is performing, where it’s invested, how much risk you are taking and what your are likely to receive when you retire.
5. How much income are you likely to receive
If you wait until your retirement, the chances are you will have no idea what income you will receive, and then it’s too late to make any changes. The longer you have to prepare for retirement, the much greater chance you have of doing something about it and achieving a comfortable retirement.
6. Is your monthly investment keeping pace with inflation
Many people set up their pensions and never review how much they are contributing each month. In very general terms average income doubles every 10 years, so we should also be reviewing our pension contributions on a regular basis so that the contributions at least keep pace with our income.
7. The State Pension is most unlikely to be sufficient
Finally, there is no doubt that the Basic Old Age pension will not be sufficient to maintain our lifestyle and keep us out of poverty. Indeed some people think that they may never receive a state pension. This may perhaps sound a little extreme, but one thing we can be sure of is that the state cannot afford to look after us, in the way which we would like.
So, get a pension review today. Most advisers will be happy to do this for you. However, our specifically designed service called the Pension Performance Review, can help you ensure that your pensions are on track for a comfortable retirement.