You and your pension – Do you know how well it will perform?

Are you one of the millions of UK residents who are unaware of what’s in store for them when they retire? Most people due to retire in Peterborough have no idea about their pension performance; instead they are just hoping that it will all be okay. Unfortunately this could mean that you are in for an unpleasant surprise when the time comes that you want to stop working and enjoy the fruits of your labour.

Pension Advice PeterboroughAXA Life Insurance recently carried out a survey and found that shockingly only 10 per cent of those surveyed were expecting care costs to affect their spending during their retirement years. The rest of those surveyed are simply burying their heads in the sand – and given that they are due to retire within twenty years they could be in for a tough time as their pension performance could be very poor.

There are many people with pensions in Peterborough in their 30s, 40s and 50s who are sleepwalking their way into retirement and oblivious to the desperate situation they could find themselves in. Many think that the state will provide for them, and many have been misled by pension performance statements, which show over inflated projections.

When you are young, pension performance is the least of your worries, especially if retirement is decades away. However, if you take the time now to really work out what your pension performance could be like when you come to retire then you could start to plug that shortfall now and be much better prepared for your retirement and instead of working beyond retirement age. Wouldn’t it be nice to relax in the knowledge that you have enough to live on and cover any impending care costs?

If you don’t make provisions now, the simple fact is that you won’t be able to retire, and if you do retire you won’t be able to do the things you want to do. This could have a huge impact on your life and your mental health – after all don’t you want to help your children and grandchildren if they need it?

The Government has taken steps to help in recent years. One of the changes made this year was pension auto-enrolment; whereby you are automatically enrolled in your company pension scheme, and have to opt out if you want to stop making payments. Previously, workers had to opt in. The aim is to encourage people to really think about retirement and making provisions now.

April 2014 is seen to be an impending ‘wake up’ call for many people in Peterborough. Why? Because after April 2014 the Financial Conduct Authority has stipulated that all projections for pensions must be calculated on a growth rate of 2 per cent, 5 per cent and 8 per cent in order to give a more realistic statement of how the fund is growing. At present, all statements are using the projections 5 per cent, 7 per cent and 9 per cent.

Many people will see a dramatic fall in the projected figures and this could prove to be a catalyst for change. What you shouldn’t do is bury your head in the sand and rely on the state or inheritance to get you through your later years in comfort.

If you are reading this and thinking ‘but I’m already making provisions’ then that’s fantastic, thank goodness some of you are taking action. However if you are in the majority of those doing nothing, you must get advice on what you can do now to improve your financial future and understand your pension performance.

The value of the investment can go down as well as up and you may not get back as much as you put in.

For sound Peterborough pension advice or if you need help to analyse how your pension is performing or if you wish to start a pension, please get in touch with Derngate Wealth Management today on 01733 561 615.

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