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With over 9.5 million* people now having a workplace pension through auto-enrolment, more and more people are now saving for their retirement.

While saving into a pension is a good thing, it’s more important than ever to review your pension’s performance. Checking your pension could make your investment work harder and ultimately, get you on track to reach the retirement you desire.

There’s more than one pension!

The pension and retirement industry is a multi-billion pound market. There are a considerable number of providers and products, making it difficult to confidently say without professional knowledge, whether you are getting the best deal for you.

Alongside your occupational pension (normally a Defined Contribution pension) there are many other types of pensions.

  • SIPPS (Self-Invested Personal Pension)
  • Final-Salary Pensions (Defined Benefit)
  • Personal Defined Contribution Pension
  • Stakeholder Pensions
  • SSAS (Small Self-Administered Scheme)

These pension types are just a few where your money could be invested. And of course, the State Pension, that you may receive depending on the amount of National Insurance contributions you have paid.

Each pension provider and product (called a wrapper) that you are invested in could have different management charges, growth rates, risk levels and potentially exit fees. So, it is worth checking your pensions or investments to make sure that you are not losing out on valuable retirement income.

How do I check my Personal Pension?

Holding any type of pension, you should be at least receiving an annual statement. If you are not, you should speak with your provider and check that your address and contact details are up to date. Incorrect contact details are the leading cause of people losing track of their pension funds.

It is estimated that some £19 billion** is sitting in lost or forgotten pension funds, so it’s definitely worth contacting your providers to make sure.

If you do not have contact details for your pension provider or you are unsure who your pension provider is, the Government’s pension tracing service could help.

*ons.gov.uk, June ‘18
**Association of British Insurers, May ‘19

Your Up-to-Date Valuation

Once you have your pension statement, check your up-to-date valuation. This will give you a quick idea of how your pension has grown over the last year, plus how much you currently have saved in your pension. If you have multiple pensions, it is a good idea putting the valuations down into an Excel sheet for easier tracking. Your pension statement will also tell you how much you have contributed throughout the year.

How much are you being charged?

Every pension provider and pension policy will have fees they charge to manage your money. These are called ‘management fees’ and can vary between policies.

Management fees are taken directly out of your pension, so you may not realise how much is being taken. We have seen good, modern pension policies charging 0.3% whilst older policies charging 3 – 4%. While the percentage difference may seem small, over a longer period this could mount up to thousands of pounds that you are missing out in retirement income.

A SIPP is aimed at people who are comfortable with investments and have experience in investing in the stock market. If this does not sound like you, it could be worth investigating whether a multi-asset pension fund could be more suitable.

Speak with the advisers at Hilltop Finance today on 0161 413 7051 and they can help find a more suitable personal pension.

Is your pension performing against its benchmark?

Included in your pension statement should be a comparison of your pension’s performance against the industry benchmark equivalent. The performance comparison is a good barometer for how your pension has performed. It will track your pension’s performance against similar products, in the same financial risk category.

A financial risk rating is how vulnerable your pension is to stock market dips or booms. The risk rating on your pension should always match your appetite for financial risk. A too risky fund could mean in times of stock market dips you lose more money compared to lower risk category products. Alternatively, on the flip side, if your fund is too conservative, you could be missing out on valuable growth opportunities during boom periods.

If you think your fund is underperforming, at least over a medium to the longer-term basis, you should consider speaking with a pension professional and potentially changing to a different fund. If you are going to switch, get advice, as you could be making a costly mistake and basing poor performance on a short-term blip.

Where is your money invested?

A defined contribution pension is usually made up of different investments, to spread risk and to benefit from any industry spikes. By understanding where your money is invested and how these investments have performed, you are better placed to understand your pension.

As with any investment decision, taking professional and expert advice from a regulated, independent financial adviser could help you too avoid any costly mistakes and provide a more secure retirement.

For an easier way to check your pension’s performance, speak with the advisers at Hilltop Finance. Our team of pension specialists can quickly check everything about your pension and deliver an evaluation on whether your pension is performing as it should, or if there are better products for you on the market.

Click here to arrange a free, no-obligation callback or call us today on 0161 413 7051.

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