Hadlow edwards - pensions

I recently read an article in the financial press that stated that 'consumer engagement in pensions is low in the UK'. This is probably true - but the real question is; why is this the case?

To an extent, the introduction of the work place pension has been a double edged sword. Yes, most working people, if they haven’t yet been enrolled to a workplace scheme, will be this year, but that in itself is part of the problem. The minimum contributions levels required to meet legislative requirements are not nearly enough to retire on, and yet it’s rare that I meet anyone, particularly if they are below the age of 40 who are contributing any more than the minimum to a workplace scheme.

If we accept that minimum contributions are not going to be enough let's look at some practical steps you can take to point you in the right direction. Hopefully this will be helpful whether you are in your 20's (a round of applause for anyone under 30 who's still reading and got this far) or your 60's, or maybe even already retired.

Number 1.
HAVE A PLAN and pay what you can. Start as soon as you can, set a budget, know your numbers - and get going. The contributions you make when you are younger will be the absolute bedrock of your fund value in years to come.

Number 2.
INVEST AN HOUR to understand what the options are. How much do you know about your employers scheme? If you paid in something extra every month - how much does your employer have to pay as well? How much income tax could you get back off HMRC this year for every £1 you pay in to look after your own financial future? If you don't know - come and see us, and we will help you understand your position.

Number 3.
ROOT OUT the old paperwork. If you have old 'frozen' schemes - what exactly are they doing for you? Who is monitoring your funds/options once you have moved on to new employers? Are they working hard enough? You really should know - it's your money, your future.

Number 4.
PAY FOR SOMEONE ELSE to start building a fund early. If you have the financial stability to start a fund or add to a fund for your son, daughter or grandchildren - excellent tax breaks are still available. You could consider doing this as a monthly payment or as a lump sum.

Number 5.
DEATH BENEFITS (the morbid bit) have you sorted out what you would like to happen to your pot, in the unhappy event of passing away? Pensions do not form part of your estate (so they don't come within your Will if you like) and knowing how to protect your funds for your children or grandchildren makes a lot of sense.

I am not sure we can make planning for retirement 'trendy' (you have to be Australian for that - where it's becoming the compulsory BBQ topic) - but I do believe we can help you get to grips your yours.

We do hope you will spend an hour with us planning the way ahead and look forward to hearing from you.

Contributed by Warren Hadlow & Medwyn Edwards, Hadlow Edwards Wealth Management Limited. Telephone: 01978 311 611 - e-mail: hadlow.edwards@sjpp.co.uk

Victoria Lee