5 ways a pension transfer could help you

When was the last time you checked your pension?

If you can’t remember, performance and high fees could be losing you thousands every year!

Yet, checking and transferring your pension is simple and it could significantly increase your income in the future.

So, in what ways exactly can a pension transfer benefit you?

Let’s take a quick look…


How can a pension transfer help you?

1 PensionYou could see your pension grow

If you haven’t checked your pension recently, how do you know if it’s doing as well as you think? You could be paying through the nose in charges for a pension that isn’t growing and potentially missing out on thousands. By reviewing your pension regularly, you get the peace of mind of knowing that your savings are working as hard as they possibly can for you. It could be the difference between just getting by in the future and enjoying a multitude of opportunities. You can learn more about checking your pension here:

 

2 PensionYou could get your hands on tax-free cash

From the age of 55, there’s a good chance you can access up to 25% of your pension fund as tax-free cash. To do this you would need to be in a fund that allows drawdown and so you may need to transfer your pension to a different provider in order to release the tax-free amount.

Pension drawdown is a way of taking money from your pension, either as a regular income or as one-off payments as and when you need them.

This is a popular incentive for transferring a pension. Yet, it’s a good idea to remember that if you move away from your existing provider, you could lose some or all your pension benefits and there may also be exit charges. So, it’s always important to speak with a trusted and regulated adviser to see if taking tax-free cash and entering drawdown is right for you.

Taking money early from your pension might not be right for you, as it could leave you with less to live on than you need; it shouldn’t be seen as an easy way to raise money. That’s why it makes sense to get financial advice before making any big decisions.

3 PensionYou could find forgotten pensions

Did you know that we have an average of 11 jobs during our working life?1 This means it’s likely that you could have more than one pension out there. Through a pension review, not only could you find a better suited pension, it could also unearth any forgotten pots. In some scenarios, it can make sense to go down the route of a pension transfer to combine your pension pots into one. And that means, you’ll only pay one set of fees.

4 PensionYou could reduce the pile of paperwork on your hands

If you have a pension review and discover forgotten pensions along the way, a pension transfer can bring together all your pensions into one pot, keeping your future savings in one place. And having everything in one place could take the hassle out of managing your pension. You will have less paperwork, only one set of fees to pay and possibly have a bigger pot than before.

Did you know? Just 1% higher scheme charges could mean £25,000 in lost growth over 20 years.2 

5 PensionYou could plan for your retirement more effectively

A pension transfer could give your pension better growth, lower charges and give you the chance to consolidate multiple pensions, if it’s suitable. If you switch your pension to one that’s dealt by a financial adviser, you will have the added benefit of it being properly managed. And with that ongoing benefit, tweaks can be made to make sure that your savings are tailored to any life changes that you have along the way.


Making the right choice for you

Whilst there are many benefits to transferring a pension, there is also a lot to consider.

  • You could lose valuable benefits when leaving your existing provider, such as an income to a chosen beneficiary
  • If you transfer away from a final salary scheme, you could lose a generous income
  • You may have to pay an exit charge for transferring which could be thousands of pounds

As with most things, it’s best to be aware of the risks as well as the benefits of a pension transfer as it can be a big decision to make. That’s why it’s extremely important to get regulated advice to make sure the path you take is best for you and your future.

And, statistics show that it pays to speak to a trusted specialist. In 2017, the ILC reported that those who sought financial advice about their pension amass up to £27,000 on average, more in their retirement than those who don’t.

You could be one of those people. So, what are you waiting for? See if you could benefit from a pension transfer today.


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 What's covered?

  • A deliciously quick overview of what types of pension you might have
  • The reasons why a transfer could be right for you
  • Industry phrases and what they mean
  • How our approach is different to most, if not all, financial advisers

 

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Important Information

¹ How to trace an old pension, online, The Telegraph, 26 October 2017

2 Based on a £650,000 sum at onset, growing at 6% per year before charges of 0.5% and 1.5% are applied.

The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new\

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