D.I.Y. is not for everyone!

The Financial Conduct Authority has been reviewing ‘Retirement Options’ since the introduction of ‘Retirement Freedom’ back in 2015.  They wanted to understand how the changes were affecting people’s decision-making process when approaching retirement. Their findings did raise cause for concern.

The initial report, issued in 2017, provided some interesting statistics.  For example: 30% of Pension Drawdown plans were purchased without any financial advice. Pensions Drawdown are an Investment and Income Product that not only needs to be structured properly, considering the risk, but also reviewed periodically to ensure they are working effectively.

Without advice, a high percentage of people take the path of least resistance and buy their Annuity or Drawdown from their current provider. In fact, over 40% of Annuity and Drawdown Pension Plans taken up were selected without advice.

The report also highlighted that whilst there are more than 50 providers offering Retirement Income Products, many people not seeking professional, independent advice are largely unaware of the options available to them. This is probably the most important and key decision any of us will make and it will affect the rest of our lives – walking down the only path presented to us could be going in the wrong direction.

Recently, on an evening out with friends, one commented “I’m retired now. I’m on a fixed budget – I’ve got to make this money last!” It made me think. A comment regularly made by new clients I meet who are close to retirement: “I wish I had given my retirement more thought”.

Well, after reading this article, do not fall into the same trap of doing nothing.

For those looking to enjoy life in retirement, it is never too early to review your options. Whenever you think ‘I really ought to do something about my pension’, do that ‘something’ today. Have a chat with an Independent Adviser and ideally one who uses Cashflow Modelling Software – this way, you will see how the retirement lifestyle you aspire to matches your pension provision. You may even be pleasantly surprised to find out how you could fully or partly retire earlier.  With more than 50 providers in the market, you need someone with access to the whole market - not just your current provider, and one who has nothing but your best interests at heart – that’s the value of independence.

My house has dozens of examples of my bad D.I.Y. – fortunately, none of my handywork is that important to our future but, my advice is, whether in the home or more critically when it comes to your Pension and financial security, D.I.Y. is not for everyone!

Source: www.fca.org.uk/publications/market-studies/retirement-outcomes-review

Note: A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.  Past performance is not a reliable indicator of future performance.

02 Jul 2018

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