A monthly feature that focuses on current financial issues. Many local Banks and Building Societies have lost their ‘in house’ adviser and few are fully independent. Eamonn has worked and lived in Whittlesey for over 30 years.
Why is my pension worth less than I thought?
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So what can be done when your plans are not working out as intended? Firstly establish the level of income and capital you require in retirement. Secondly get a realistic valuation of all the benefits including state pension and the options available in terms of when and how much each arrangement can offer you. Thirdly – what other assets and In this case his fund What can you do if your options are available has not grown by retirment plans aren’t 12% each year and working out - establish the to you. Alternatively appoint a good adviser contributions remained level of income and capital who can calculate any the same as when he you require in retirement shortfall, calculate how started it – £30 per tax will affect matters, month no longer buys then if a gap exists – a significant income in some options to consider. retirement, even after 30 years. ‘I was told I’d be well off in retirement – what’s happened?’ commented a client of mine recently. He made a good point, having started saving in a pension scheme over 30 years ago, his original illustration used growth rates of 12% per year, and assumed contributions would increase by 5% each year.
These days advisers use much more realistic about growth rates, and benefit statements include a degree of fine-tuning to take account of inflation. At least this client is not currently fighting against double digit inflation, which was the case when he took the plan out – but even now, inflation is a significant factor.
If any of the above is a concern for you I will be happy to provide a free initial consultation to help clear a path through what can be a complex area of financial planning
Dip PFS
September 2011 | Discovering
Whittlesea
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