The advantages of regularly reviewing your pension
As we’ve established, your pension is the income you will live on when you finish. You’ve worked hard, so your pension plan should be working hard for you in return, to ensure that you’re able to live the comfortable lifestyle you deserve.
If your pension plan has been following the same investment path since day one, it could be that your retirement pot isn’t quite as substantial as you might have hoped – and won’t fund the kind of retirement you were hoping for.
So, this is where the benefits of regularly reviewing your pension plan comes into play. For example, you may find that what you currently pay in annual fees for a number of separate pension funds could actually be transferred into one single fund with lower management fees.
Or, if you are thinking of taking either an annuity or a drawdown at retirement, it is certainly advisable to search the whole market to find the best option. If you want to buy an annuity, perhaps another provider could give you a greater choice of options and – potentially – a higher income.
Other major considerations to take into account are whether your attitude to risk has changed or how much tax you will pay on your pension.
Our attitudes to risk vary at different stages of our life, depending on how close you are to retirement, how financially secure you are or how much growth you feel you might be able to achieve before you bring your career to a close.
What are the implications of tax on your pension fund? Reviewing your pension plan will allow you to plan for and mitigate against those implications, or there could even be great options you didn’t know about for managing tax in a way that suits you and your circumstances.