A couple talking to a financial planner.

4 valuable ways a financial planner can help you tackle “overwhelming” pension information

Do you find pension information confusing? You’re not alone; 50% of people in the UK describe the information they receive about their pension as “overwhelming”, according to a Standard Life study.

Fortunately, there are places where you can seek guidance or advice. The survey found 83% of people think financial advisers offer useful support.

If you’re not sure if your pension is on the right track, a financial planner could help put your mind at ease. Here are four reasons why. 

1. A financial planner can cut through jargon

Pension information can be filled with jargon that makes it difficult to understand exactly what it is saying. 

From “annuities” to the “Tapered Annual Allowance”, a financial planner could help you cut through confusing terms and take the time to explain what they mean and, more importantly, whether they’re relevant to you. 

Having someone you can turn to for answers that you know you can rely on is invaluable. 

2. A financial planner can help you make sense of pension statements 

Your pension provider will provide a statement each year; this may come in the post or be online.

It will cover pension contributions, including your own, those made by your employer, and tax relief. These figures can help you understand how much is going into your pension.

As your pension will usually be invested, the statement is likely to include investment performance too. As investments can be volatile, it can be difficult to know whether your investments are performing well or not, and it’s also essential to ensure they match your risk profile and goals. As financial planners, we can help you get to grips with pension investments. 

In addition, your pension statement will include a forecast. This is a projection based on assumptions that the provider makes, including your retirement date and investment performance, so it’s not a guarantee. 

The pension forecast can be incredibly useful when thinking about how your savings will add up to deliver a retirement income. But understanding if it’s “enough” is another challenge. 

3. A financial planner can help you calculate if you’re saving “enough”

Calculating how much you should be saving into your pension can be complex. There’s no one-size-fits-all figure, so you’ll need to consider your circumstances and goals to understand what is “enough”. 

Not only will you need to calculate potential investment returns, but also the income you need to create the retirement lifestyle you want. As a result, setting a pension target often means pulling together different pieces of information, from life expectancy to other assets you’ll use to create an income, like savings. 

A financial plan can help you understand what is “enough” for you to retire on, and, importantly, the steps you can take to reach the goal. With a clear blueprint, you’re more likely to retire with enough savings to live the lifestyle you want. 

4. A financial planner can create a plan that means you can enjoy retirement

A financial plan can help you get the most out of your money, and allow you to really enjoy your retirement. 

There’s strong evidence that taking control of your finances could boost your wellbeing. In fact, 93% of people that planned for retirement with an income of less than £20,000 say they are enjoying life after giving up work. However, only 66% of people that didn’t plan could say the same.

Despite this, 7 in 10 people are doing very little, if anything, to plan for their retirement.

So, arranging a meeting now to create a plan for when you give up work means you’re more likely to enjoy the next stage of your life. It’s never too soon to start retirement planning, and doing so earlier could grant you more freedom in the future. 

Contact us to talk about your pension

If you want to talk about your pension and start thinking about what it means for your retirement, please contact us. We’ll work with you so you can have confidence in your retirement savings and look forward to the milestone. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). 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 results. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.  

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