Security could be one pension review away

Today is Paul’s big day.

Blinking his eyes open, he turns to look at his bedside clock: 08:35.

A smile begins to appear on his face. It’s not a weekend lie-in that he’s enjoying; it’s the first Monday in recent memory that he isn’t being startled awake by a screeching alarm.

This is the start of his brand new routine.

The first day of retirement.

With a sigh of contentment, Paul ponders the things he’s given up: the early mornings. Rushing around to leave the house on time. The commute. The traffic. Time away from family.

Then, the smile getting bigger, the things he’s gained: time and the freedom to do what he wants, when he wants.

Maybe he’ll stay in bed a while longer. Or read a new book in the garden. Or go out for breakfast.

There’s no rush to decide. And that’s the beauty of his new situation: what he does is now entirely up to him.

He’s planned carefully, and now, years after having a pension review, he has the peace of mind that his savings are ready to look after him.

Paul didn’t have a job that provided a generous final salary scheme, promising a secure income for the rest of his life.

Actually, he didn’t have any kind of company pension so he opened a private one instead.

Over the years the size of his contributions fluctuated. They stopped altogether when his first daughter came along and didn’t start again until she was three years old. Five years ago, with retirement in his sights, Paul decided to save a lot more.

It wasn’t always plain sailing, though. During that time when he wasn’t paying into the pension, he forgot the details and opened a new one – angry at himself that he’d lost all the money he’d put away, he saved harder and vowed not to make the same mistake twice.

The new nest egg began to grow, but Paul hadn’t been able to shake the disappointment at losing his original fund. What really annoyed him was knowing that the money was still invested so it could still be growing in value – and he’d never get to use it.

Or could he?

On his 50th birthday, Paul had felt it was time to make sure his financial future was on a good track, and decided to see an adviser.

He found one he was comfortable with later that week, and the adviser carried out a pension review. In the process, he found Paul’s lost pension. He also explained that both of the funds could be consolidated into a modern scheme with lower fees, saving him money.

This had a profound impact on Paul and lifted a huge weight from his shoulders.

By today’s standards, many older schemes like Paul’s were really expensive, taking 2-3% of his savings every single year. The simple decision to switch his pensions into a modern one added thousands of pounds to his fund over the years.

Paul also realised something important: keeping more of your savings is like getting free money, and with fees now less than 1% a year, he was feeling more than a little happy.

The decisions Paul made allowed him to have the freedom to retire with the lifestyle that he wanted. He knew that taking the first step and reviewing his pension empowered him, giving him knowledge he could use and allowing him to choose the best option for his situation. Just like switching a bank account for a better interest rate, lower overdraft charges or simply out of preference, not all pensions are the same and getting the right one might require moving into a better scheme.

When his children say they want a retirement lifestyle that’s similar to his, Paul can tell them that a simple pension review is key to being sure they’re on the right track.

You don’t need to be a financial guru to have a great pension

Paul’s financial security didn’t happen by accident. He knew that you don’t need to be a money wizard to make the right decisions – just get advice from people in the know and who can take care of everything for you. Just like people get advice on their cars from mechanics, and medical advice from their doctor.

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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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