Ten million don’t check pensions

Solomons-financial-advisor-wimbledon-blogger

Ten million don’t check pensions

Wow! according to research conducted by AVIVA (who used to be Norwich Union) about ten million people are not checking their pensions. That is staggering. For many people their pension will be their second largest asset, their home being the largest.

ICM research surveyed 1500 people online, who were 45+ but under retirement age. A staggering 63% did not bother to check their pensions. AVIVA have extrapolated data from their research and widely known information about pensions published by the Office of National Statistics (ONS). Their data suggests that there are about 8.1m active occupational pension scheme members and about 8.2m with active private pensions. Active doesn’t necessarily mean “paying into” – after all these are pensions that alter in value each year (or day) and ultimately have a maturity date. Breaking down the numbers (a precarious exercise) results in AVIVA concluding that about ten million people do not check the value of their pensions.

So what?

Even if the numbers are vaguely correct, there are probably a variety of reasons why people do not check their pensions. Frankly it could be as simple as they lost them or didn’t know they even had them (from former employers). It might be the constant name changing of pension companies due to all the mergers and acquistions that have occurred over the last 20 years. It may be that they realise that the pots are so small that to check them seems rather trivial. Equally it may be that because they are small, few wish to be reminded of the reality of the pension provision.

Not always the ostrich

It isn’t as simple as dismissing ten million people as little more than the proverbial ostrich. The reasons can be rather more complex. In any event, whilst the ostrich is known for its head-in-the-sand behaviour, it does have a rather large nest-egg and of course, whilst flightless, is a very fast and powerful runner, even being raced…

One problem is the simple number of pensions to keep track of . The research found to be the main reason why people consolidated pensions (of those that did). Consolidating pensions can make a lot of sense, but it needs to be done very carefully – some older style pensions have various guarantees which may be worth keeping. Some may have very high penalties for transferring them to a different pension.

Making the best of things

Whatever the reason, being prepared for retirement and knowing what you are aiming for is important to us all…. ask any pensioner! As a financial planner, I work with what you have built up and then we figure out together what you need and how to best get there. May I urge you, if you are not a client to begin by downloading my free guide to regaining control of your pension. If you are a client, please share this information. Drifing into retirement will result in serious disappointment.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Lost your pension?

Many people have lost track with old pensions, frankly it is hardly surprising given the number of name changes, mergers and acquisitions of various pension companies over the last 40 years or so. Perhaps you have lost your pension too.

Consider the various jobs that you have had over the years, however small, perhaps there is an old pension lurking somewhere in the midst of your curriculum vitae.

Pension evolution…. perhaps revolution

Pensions have improved dramatically over the years and almost unrecognisable from those I first understood over 20 years ago. The evolution continues and something that adviser firms like ourselves spend a lot of time researching and reviewing. Cheap is not always best, but then neither is the most expensive.

The media, consumer groups and various politicians have regularly made statements about the charges on pensions, some of which are accurate, some are not. However, I imagine you would like to know if your old style pension could be brought up to date.

Free-report-How-to-regain-control-of-your-pension

Find your lost pension

The Pension Tracing Service (PTS) was set up to help find lost pensions. In essence everyone has a National Insurance number that is unique to them, this is the main tool used to search for lost old pensions. It is believed that there could around 50million dormant or lost pensions “in the system” by 2050 due to the growing number of small pensions (due to auto enrolment, or workplace pensions).

Once lost, now found

Last year the PTS was contacted over 145,000 times and we expect this to increase considerably. They aren’t always successful in tracing pensions, but last year managed to trace 87% of those believed to exist.

Regain control of your pension

So it would be advisable to check if you have any lost pensions and then check them (and any old pensions that you haven’t lost) to determine if they can be improved. I have put a free guide together about this, which I have called “Regaining Control of Your Pension”. You can download it for free (tell your friends and colleagues) simply by completing the online request below this item.

Dominic Thomas
Solomons IFA