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These are pension pots left behind when people move between jobs. This is especially prevalent at the start of careers. The Pensions Advisory Service has warned people that the process of finding these missing pension pots can be extremely slow. Some individuals don’t remember starting up a fund while others are of the opinion that the money has been swallowed up by companies. Pension transfers with this money can be difficult which is why you need great pension advice.

It is estimated that there will be almost 5 million small pension pots added to the system in the next 40 years. The main reason for this is the auto-enrolment scheme implemented by the government which compels employees to save cash. Another reason is the fact that workers switch jobs with regularity in a bid to find the most suitable vocation and company. As the rules stand, it is difficult for people to claim their hidden pension cash. The Department for Work and Pensions state that around 70,000 people get in touch with them annually for help in finding a lost pension.

Pension Tracing Service

At present, pension advice is more valuable than ever for those seeking to be reunited with long-lost funds because of the low savings rates and falling annuity rates. A major problem faced by many searchers is that the company they used to work for no longer exists or else it has been the subject of a takeover. Then there is the small matter of lost records. There is a Pension Tracing Service that can help because it has access to over 200,000 personal and company pension schemes. This pension advice could help you contact the relevant pension provider to find out if you are entitled to any pension payment. If you go down this route, we suggest that you have as much information on hand as possible regarding the pension scheme.

If you successfully use pension advice to find an old fund, you’ll need to carefully look at the details of the scheme to see if it’s worth making a transfer. There could be valuable guarantees that will be lost if you transfer, not to mention fees. Some pension schemes carry benefits such as guaranteed growth and annuity rates which could be worth a fortune. If you have an old pension scheme, it may have an in-built annuity rate which is far beyond anything available today.

It’s important to note that a pension transfer may not be worth it if the pot is less than £5,000. However, it is possible to cash two pension pots worth less than £2,000 each once you reach 60 for a lump sum. 25% of this cash will be tax free. If you have missing cash or are in need of pension advice, contact us today and we will place you in touch with a reputable pension specialist.

This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.

The post How Good Pension Advice Can Help You Find Hidden Savings appeared first on Pensionfinder.

 A new voluntary code of practice was published on 8 June 2012 and involved input from representatives of the Department of Work and Pensions. This code of good practice was requested by Steve Webb, the Pensions Minister, and asks pension companies to follow a list of regulations which are explained below.

No Cash Incentives: Pension companies are not allowed offer cash payments that are dependent on whether or not a customer accepts an offer for a pension transfer. Small incentives such as gift vouchers are permissible but only if the individual is not pressured into accepting an offer.

Ÿ Independent Advice: A customer must be given independent financial advice which should show that the benefits they receive with a pension transfer are greater than the benefits given up.

Ÿ Communication: All communication with customers must be clear with no attempts made to confuse or deceive them. The initial offer must explain the downsides of the pension transfer.

Ÿ Records: A record of incentives offered and customer responses must be kept. It is also necessary for financial advisors to keep a record of when someone chooses an offer which is contrary to the financial advice given.

Ÿ Pressure: No pressure must be placed on the customer and they must be allowed ample time to make up their mind. A three month period for making a decision and a two-week cooling off period after completing forms are considered as fair benchmarks.

Ÿ Vulnerable Customers: Those over the age of 80 can be offered incentives on an opt-in basis but a strict vulnerable client policy must be followed.

Ÿ Good Faith: All parties in a pension transfer discussion must be aware of their roles in negotiations and must act in good faith.

At present, this new code of practice is voluntary but it is possible that additional legislation will be added by the government if they feel that the current code is not being followed. At Pension Finder, we will do everything we can to put you in touch with a pension advisor that follows the above code of practice. We assist dozens of people with pension transfer issues and hope to see that number swell as the importance of making the right decision regarding pensions really begins to hit home.

This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.

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 There are an estimated 1.7 million postcodes in Britain which are used by insurers to cut thousands of pounds off pension pots in areas considered to be affluent such as Surrey and Middlesex. It is the opinion of insurers that those living in wealthy neighbourhoods live longer than the average life expectancy. As a result, these individuals claim their income for longer and thus are deserving of lower monthly payments.

 Worrying Statistics

Government statistics released in April 2012 show that a 65 year old man living in a supposedly wealthy area is expected to live until the age of 84. This is good news for insurers but emphasises the need for top notch pension advice. In areas where the standard of living is considered to be lower, the average life expectancy falls by over three and a half years. According to financial experts, those who are diligent and put money aside for their pensions are suffering as a result of these statistics and the conduct of insurers.

The use of postcodes to decide a person’s life expectancy has been roundly criticised. Even annuity firm bosses point out that two people living side by side in the same neighbourhood could have completely different lifestyles, health issues and life expectancies. Because of the lottery of postcodes, the only way to come out on top is by looking for the best pension advice and finding pension options suited to your specific needs.

Falling Rates

There are firms that offer annuity boosts to individuals who smoke or have an illness. In some cases, these boosts could be worth up to 50% and remove the need to use an address to come up with a random life expectancy figure. Approximately 60% of UK residents are eligible for an annuity enhancement but only 20% apply according to industry figures.

In 1990, annuity rates were at a level where a £100,000 pension pot was worth approximately £15,600 a year in cash. Today, the same pot gets you just £5,300. The nation’s biggest insurers are cutting their rates and a 65 year old person with a £100,000 pot needs to live another 19 years just to break even. If you have been wise enough to save money for the future or are planning to, talk to us today and we will find you the best pension advice. We specialise in pairing customers with pension advice experts and help them reap the rewards of prudent savings in retirement.

This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.

The post Pension Advice: Save Thousands By Shopping Around appeared first on Pensionfinder.

Pension providers contact investors once retirement age approaches and explain the level of income likely to be received from the retirement fund. However, some pension providers are guilty of providing incomplete information in a bid to persuade the consumer to purchase an annuity that the provider is keen to sell. Unfortunately, such annuities often represent poor value for money.

However, the new rules mean that pension providers must provide detailed information on the annuity choices while encouraging consumers to shop around. At the moment, less than half of Britons who retire exercise their right to research various annuity providers. This inaction could result in a 40% loss of income over the course of retirement. Additionally, providers must disclose information about alternatives to traditional annuities such as options that take inflation into account or annuities with a short-term which allow the consumer to purchase another short-term annuity at the end of the current cycle.

This is news that has been welcomed across the industry. Thanks to these new regulations, those who invest in pensions will finally have more freedom when purchasing annuities. These rules will apply to over 50 pension providers and if any company fails to comply, they face being kicked out of the ABI. This would be a major blow to their credibility and would see them lose a significant level of custom.

This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.

The post Pension Providers To Provide Clarity On Annuities appeared first on Pensionfinder.

Enter the Fees

Naturally, providers aren’t investing your money out of the goodness of their heart. The consumer expects some form of charge but the level of fees can be exorbitant if you choose the wrong pension provider. A recent survey by financial analysts has shown that there are enormous disparities between the fees of providers despite placing the money in identical funds. How expensive can a poor choice be? £40,000!

The survey showed that pension providers with the lowest fees could save a person who contributed £2,400 a month for 25 years a total of £40,000 when compared to providers with the highest charges. This is a startling statistic and really brings home the importance of researching before settling on any one company’s services. The loss gets worse when converted into a 20 year annuity. Using the above figures when the pension gets converted into regular income, you could be looking at a loss of over £47,000.

 How do they get away with it?

At present, pension providers are allowed continue on their merry way because the Financial Services Authority (FSA), theUK’s main pension regulator, has not cracked down though the body has promised to take action. Large industry providers believe that disclosing the whole truth may cause people to forget about investing in pensions. They insist thatBritaincan’t afford such an occurrence as the nation is currently facing a pensions shortfall with a huge percentage of people lacking a pension and becoming reliant on the state pension instead.

However, other experts state that the age of secrecy must come to an end. According to members of top investment firms, there are up to 16 hidden charges on pension investing which have yet to be revealed to investors. Pension providers add fees relating to currency exchange, trading, commission and numerous other activities of which the public are blissfully unaware. According to a financial firm’s survey, an incredible 80% of investors believe that pension providers are not giving them full disclosure when it comes to fees.

No More Commission

According to the FSA, pension providers will be banned from giving commission to financial advisors for selling pension plans. This ban is expected to come into effect in 2013. Although this will be an important development, it is still estimated that there will be a difference of £11,000 between what is charged by providers offering the highest and lowest fees.

Transparency

Unfortunately, the calls for transparency within the pension provider industry are far from deafening. However, those who are calling for it are making themselves heard. There are low cost investment firm who are leading the way and have launched campaigns which they have dubbed ‘True and Fair’ as a means of shedding some light on charges paid by investors. Although the figure is by no means 100% accurate, it is estimated that more than £2.5 billion a year is taken by various parties when buying and selling investment fund shares. This is almost 5% of the total funds held byUKcustomers.

Hopefully, pension providers who have large amounts of hidden fees will be forced to become more transparent. Until then, you will need to carefully research any pension decisions you make to avoid losing tens of thousands of pounds over the next couple of decades.

This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.

The post Investors Must Be Alert To Hidden Fees Charged By Pension Providers appeared first on Pensionfinder.

Nonetheless, there are retired individuals living on less than half the UK minimum wage annually. It is clear that these unfortunate people didn’t receive good pension advice or else they simply didn’t listen. Of the millions of over 50s with no pension plan in place, over 40% said that they couldn’t imagine being forced to live even on minimum wage let alone on a state pension far below this.

If you haven’t already started looking for pension advice to save money once you retire, do it now before it’s too late. A report from a respected organisation that specialises in pensions suggests that over 50% of over 50s today will be forced to work until they are 77 years old. We cannot expect help from the UK government who are experiencing a massive shortfall in pensions as it is. The plan is to increase the pension age to 66 by 2020 and 67 a further eight years later.

In fact, the government wishes to abolish the aforementioned benefits and switch to a flat pension rate of just £140 a week. There has never been a more crucial time to seek pension advice and get your retirement finances in check. Contentment and even happiness in later life depend on it.

This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.

The post Pension Advice Critical As Millions Have No Pension Plan At Age 50 appeared first on Pensionfinder.

Seek Independence!

One of the simplest pieces of pension advice you will ever receive relates to seeking a meeting with an Independent Financial Advisor (IFA). Many people baulk at the idea of seeking professional advice because of the cost. First of all, IFAs are not that expensive and secondly, their expertise is likely to save you several thousand pounds by the time you reach retirement. IFAs are legally required to give you the best advice and must produce a letter explaining why they made a particular recommendation. Nonetheless, you must be careful because if you buy directly from a pension provider or use an execution only option, you will not gain compensation for losses incurred after getting bad advice. This is because the final decision to invest in a pension scheme is deemed to have been made by you.

Pension Types

Another key facet of useful pension advice involves the types of schemes on offer. Occupational pension schemes are organised by an employer for employees of the company. These are considered the best because of the huge array of benefits on offer including generous tax relief and employer contributions. If your company does not provide a pension or you are self-employed, a personal pension is your next best option. Stakeholder personal pensions tend to be flexible and have relatively low fees and charges. When seeking pension advice, it’s best to keep things simple and avoid looking at complicated pension options. In general, the more complicated a scheme is, the more you stand to lose.

Simple Pension Advice

The best pension advice is information you can understand. For example, it should be obvious that shopping around is vital as this one of the largest and most important financial decisions you will ever make. Again, using the services of an IFA is an essential requirement. Always pay close attention to information on charges and flexibility and never forget to be realistic when it comes to deciding how much to save. You should also factor in your state pension when calculating the amount of money you’ll need to have a comfortable life after retirement.

Past Performance

Another critical piece of pension advice is to carefully analyse the past performance of any pension scheme you have your eye on. It’s important to note that this analysis needs to go beyond merely looking at a fund’s investment growth. Performance is supposed to be dictated by the skills of fund managers.

Oftentimes, it doesn’t work out this way as they simply rely on financial markets and stock performing well. However, there will be cases when the talents of a fund manager dictate fund performance. It is possible that the person responsible for excellent past performance has moved on and no longer works for that company. Therefore, you need to find out how long the fund management team has been working for that company. Of course, you should never assume that great performance in the past will translate into future success.

In conclusion, don’t have the attitude of taking pension advice where you can get it. The quality of the advice received is far more important than the quantity. Never cut corners when the future of you and your loved ones is at stake.

This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.

The post Pension Advice You Can Take To The Bank! appeared first on Pensionfinder.

Terms of Use for pensionfinder.org.uk

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This website acts as an advertising and marketing vehicle to attract individuals for our introducer network and, as such, the owners, webmasters and marketing professionals of this website are unable to offer financial advice. Any information contained on the website does not form the basis of any contract. Business or financial decisions should not be based solely on the information contained within this website.
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(17) Last updated
21st February 2012

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Best answer:

They can do both or either. Personally, I think that you should use a fee-only Certified Financial Planner. That way they have no financial interest in what you buy or invest in.

The post How do Independent Financial advisers get paid? appeared first on Pensionfinder.