Retirement planning is so important, but pensions can be difficult to navigate, especially if you have multiple plans with different providers. It is important that you understand which pension plans you are enrolled in, how much is in them, and whether you are getting the most out of your money, and that’s where Manor Wealth come in.
In many cases, you could benefit from making changes to your pension and transferring funds to a new plan. However, most people do not realise that this is an option or they don’t know how the process works, so they need expert advice. If you already have a good pension scheme, transferring may not be the best option for you. We can give you advice on whether a pension transfer is right for you or not, and we can also answer any other questions that you have about retirement savings and pension schemes.
Below, you can find answers to some of the basic questions that you may have about pensions, but if you have more complex queries, you can get in touch with Manor Wealth today.
What Kind Of Pension Do You Have?
This seems like a simple question but most people do not know which kind of pension they are enrolled in, especially if they were auto-enrolled.
There are two main types of pension; defined contribution and defined benefit. A defined contribution pension means that you and your employer are both paying into a pot of money that will be reserved for your retirement. This is the most common type of pension and if you were auto-enrolled, it’s likely that this is the kind of pension that you have.
Defined benefit pensions are less common and they have been phased out of the private sector in most cases, but they are still fairly common in the public sector. If you have a defined benefit pension, you will be guaranteed a set annual income for the rest of your life. You may have heard a defined benefit pension called a final salary pension.
How Much Are You Paying?
You should get an annual statement from your pension provider to tell you how much you have in there. If you have not received a statement, you can get in touch with your provider and ask for one. The HR team at work will know who that provider is if you do not.
The standard contribution for auto-enrolled pensions is 8 percent. That is 4 percent from you, 3 percent from your employer, and 1 percent from the government. However, this varies because your employer may contribute more. On average, you should try to put around 12 percent of your salary for a comfortable retirement, but this does depend on your personal financial situation.
How Can You Improve Your Pension?
There is no easy answer to this question because everybody’s situation is different. The biggest mistake that people make with their pension is simply leaving it. You cannot set up a pension and do nothing with it if you want to get the best out of it. It needs to be reviewed regularly, especially after major life events like a marriage, having children, or getting divorced.
At Manor Wealth, we can help you to review your pension scheme and see whether it is working for you. If changes need to be made, we can give you the advice that you need to get the most out of your retirement fund.
Should You Transfer Your Pension?
This is one of the biggest questions that clients have about their pension, and it all depends on your personal situation. In some circumstances, a defined benefit transfer can work in your favour. However, it is not always the best course of action, and Manor Wealth as part of Quilter Financial Planning can assist you with introducing you to the right advisor to decide what is right for you.
We can offer a review of all types of pensions. Our pension advice will give you a picture of what your finances will look like during retirement.
Each case is unique and it’s important that you don’t make the wrong decision about pension transfers because it can make things very difficult for you during retirement. Manor Wealth is here to make sure that doesn’t happen by giving you expert advice on whether a pension transfer is the right course of action or not.
If you have any questions about your pension or, more specifically, pension transfers, get in touch with Manor Wealth today.
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