If you’ve accumulated numerous workplace pensions over the years from different employers, it can be difficult to keep track of how they are performing. There is a danger that long-forgotten plans may end up festering in expensive, poorly performing funds, and the paperwork alone can be enough to put you off becoming more proactive.
Best course of action
Whether you have one or a number of pension funds, it may be appropriate to have these reviewed. The best course of action will depend on what type of pensions you have and how long you have until retirement.
Making the most of your pensions now could have a significant impact on your financial well-being in retirement, and getting it right could mean a higher income, or even an earlier retirement date. By reviewing your pension now, you can check the charges you are paying along with the investment return. Lower charges don’t always mean higher returns but it’s
worth checking, as you may be able to increase your retirement income.
Investment performance
If you’re in a final salary scheme, it will almost always make sense to stay where you are, but if you have any other type of pension, where success or failure depends on the performance of your investments, reviewing them now is worth considering.
Consolidating personal pensions into alternatives, such as a self-invested personal pension (SIPP), can provide a wider amount of investment choice with a potentially lower cost, but this is a very complex area and you should always obtain professional financial advice.
A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
