As a financial management company, we have had a lot of enquiries lately from clients wanting to know what to do with their pension funds. The answer is that there is no one-size-fits-all - there are a multitude of things to consider: residency, nationality, age, sex, tax status, existing savings, risk profile, annuity rate, type of scheme, marital status, the list is endless so please do not be surprised if the stock answer is 'it depends'.
What is essential is that you have a company or private pension scheme in the UK - DO NOT just accept the first offer that comes along. There have been some financial press articles recently criticizing financial firms for giving poor value annuities and 'ripping off' pension pots. The truth is that in their paperwork they will always recommend that you seek independent financial advice but what normally happens is that a retiree just wants to get the paperwork sent back because they don't really understand it.
Make sure that an Independent Financial Adviser (IFA) looks at your scheme and looks at all the alternatives available for you and YOUR circumstances. This can only be done if a FULL analysis of your present and future situation takes place and all the alternatives are explored.
A client last week obtained a difference in income by shopping around by over £6,000 per annum. Another client started receiving pension benefits before talking it through with us and it was too late to get a tax-free amount of £75,000. In today's financial climate it is essential you do everything you can to make sure your money is safe and secure.
This advice was given by Blacktower Finanacial Management (International) Ltd.
This article was first published in A Place in the Sun Magazine.