31 October 2022
When it comes to planning for your future, there might seem like there is a lot to think about and one thing that you might have heard about is consolidating your pensions.
Opting to consolidate your pensions can save a lot of work as well as money and time but is it right for you? Through your years of working, you might have picked up a number of pensions with different providers and this can prove challenging when it comes to managing their performance. This is where pension consolidation can help as this can help to reduce costs and there will be less paperwork. So, why should you consolidate your pensions?
Reviewing them Is Easier
It can prove a challenge to manage your pension, especially when you have pensions with a number of providers. When you consolidate your pensions, you can track them more efficiently and see how they are performing. This will give you greater clarity over the money in your pension and it enables you to make quick changes without the need to communicate with different providers.
Pension Costs May Be Reduced
When you combine all of your pensions together, it could mean that you reduce your pension costs at the same time. One way of looking at this is that the fewer costs you have to pay, the more money will have when the time comes to retire.
Older pensions have high charges associated with them and over time, these costs can eat into your pension, leaving you with less money. When you choose to consolidate your pensions into a modern pension, you can reduce your costs significantly.
Enhanced Performance
Your pension is likely to increase and decrease in value and how it is invested will determine the highs and lows. There are some pensions that will only utilise a small number of investment funds and that can mean that your pension might not perform very well. However, a newer pension will access a huge array, often thousands, of varying investments. So, when you consolidate your pension, you will have more funds that you can invest in and this provides an increased level of flexibility and choice when it comes to finding a strategy that works for you.
Improved Flexibility Once You Reach Retirement
In previous years, there were rules in place that meant that you had to use your pension to purchase an annuity when you reached retirement. This all changed back in 2015 which means that people are able to withdraw an income flexibly from their pension. However, this change does not help everyone, especially those who had a pension in place before 2015 whereby the only option was to purchase an annuity. The way to overcome this is to consolidate your pensions into a new pension as this will enable you to take advantage of the flexibility of being able to draw down an income.
Deciding whether to consolidate your pension is a big decision and it won’t work for everyone. However, understanding the reasons why you should, will help you to make an informed decision.
We are here to help
my corinthian is about planning for the future and making decisions about your money based on what you want for your future. We can help you combine old pensions, and get clear on how best your pension can work for you. It’s about setting goals and deciding how much risk you’re willing to take with your investments. It’s also about understanding what kind of lifestyle you want to lead and how much you can afford to spend every month.
When you have a financial plan in place, you can rest easy knowing that your future is secure.
In addition to the peace of mind that comes with being prepared for the future, there are countless advantages of financial planning. From emotional and health-associated benefits to social and financial benefits, financial planning positively impacts every aspect of your life.
Small wins eventually accumulate into large financial milestones, such as purchasing a car, paying off a mortgage, saving for a child’s education, or being able to stop work and retire comfortably.
Got questions? We’re all ears. Drop us an email [email protected] or
get in touch with us – and let’s get your journey started.
