Maximising your pension performance
A pension is a tax efficient way to save for your retirement. Its performance can fluctuate markedly according to prevailing economic conditions, and there are numerous options in terms of diversifying the spread of investments or consolidating policies together.
At Select Investment Managers, we recognise that achieving the maximum return from a pension vehicle (and avoiding any shortfall) is crucial to generate sufficient income for a safe and happy retirement. We also appreciate that this industry’s complexity can seem daunting to people wishing to investigate their options, or make changes to their existing policies.
For these reasons, our knowledgeable financial advisers offer jargon-free support and recommendations based around each client’s unique circumstances and preferences. As regulated financial planners, we won’t suggest high-risk strategies unless our clients expressly request them. At the same time, we’ll provide detailed guidance on how to aim to extract the best returns from each pension vehicle.
A regular pension review can ensure that the most suitable path is being taken in terms of risk and rates of return. We believe this is a conversation that’s best conducted face-to-face, so that clients understand why any changes are being recommended – and what it will mean for their pensions. That’s why Select Investment Managers has a team of expert financial advisers in Edinburgh, as well as surrounding towns including Falkirk and Livingston. These experts are ready to sit down and talk through a wide range of available options.
Why a review may be needed
Many people are content to direct a fixed monthly sum into their pension, and then leave it to its own devices. However, there are various factors that can affect the performance of a pension over time, and each may require adjustments or changes. Our team of experts (based in Edinburgh and across central Scotland) can offer practical advice on aspects including:
- a)Cost. Setting aside a certain percentage of monthly income may be optimal at the moment, but what about when incomes vary or circumstances change? Today’s pension commitments may not be appropriate tomorrow. There may also be management and administrative charges levied on different funds, which should be reviewed periodically.
- b)Performance. Pensions work by reinvesting regular contributions into a diverse variety of investment options, such as shares and bonds. Each vehicle’s performance will fluctuate over time, as the economy ebbs and flows. Rather than entrusting the pension provider’s default option, it’s often better to make key decisions about where money can work hardest.
- c)Risk management. It’s a common phenomenon that younger people take more risks with their investments, before adopting a more cautious approach as they get older. Changing an investment strategy as retirement age approaches is a sensible step, but also one that requires expert consultation to ensure the right decisions are made. That’s particularly true for specialised funds, where financial knowledge is vital.
- d)Consolidation. Many people have small pensions amassed during a particular spell of employment, which are individually modest but collectively offer the prospect of a comfortable retirement. Consolidating these into a single high-performing vehicle can be time-consuming, but it’s a step that may be worth taking if the pensions aren’t defined benefit schemes and you won't lose any guarantees/benefits or incur any penalties. Speak to one of our advisers to see if this is appropriate for you.