A recent study by Standard Life has shown that less than one in 10 of those aged over 65 feel confident about managing their retirement finances.
Retirement is of course an uncertain time for many people, whether financially or simply the trepidation of entering the unknown and perhaps not knowing how you might spend your time, after a lifetime of work.
It is difficult to quantify the ‘unknown’, but you can do quite a bit to plan your finances for later life.
The Standard Life retirement voice study, conducted among 6,000 consumers, revealed that 43% of over-65s didn’t feel they understood the various options available to them to access retirement finances.
Standard Life also found that more than half (52%) feel nervous about accessing their retirement funds.
The findings also showed that only 13% were confident they know what options they have to use their pension savings to provide them with an income in retirement.
But more than half (54%) were worried about making bad decisions around using their retirement finances.
This column has visited the topic of pensions many times, but it remains a bewildering subject for many people – and understandably so, because there are a great many variables to consider.
Will you take money from your pension fund as a lump sum? When and how are the best options for this, depending upon your circumstances? How much tax will you pay?
What it all boils down to, of course, is not being afraid to seek advice and in plenty of time to ensure you are well prepared and informed.
An Independent Financial Adviser (IFA) such as ourselves would certainly be happy to offer you guidance on the options available going forward – there is a lot to consider and struggling alone really isn’t the best option with something so important.
Things to think about include: Do you have a plan for your retirement? How much income do you require? Will your outgoings increase, fall or remain the same? Are your investments and pensions working as hard as possible for you?
Are you planning effectively for the best possible retirement, however you may prefer that to look? What kind of legacy (if any) do you wish to leave for family or dependants?
From the level of risk to the voluntary contributions you can afford to make and the timing, this will all impact the final provision and you can never start too soon.
You may also have arranged pension plans several years ago, but are these still the right ones for you and your circumstances – is your pension investment able to invest anywhere or is it limited to the providers own funds, with a limited range? Is someone responsible for day-to-day monitoring of your pension?
You can also seek more information and guidance about pensions from Pension Wise, an impartial service backed by the Government. Go to www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise.
