Is your pension plan fit for purpose?
The results of research conducted recently for Baring Asset Management, suggest that almost half the working population of the UK (45%) have never reviewed their pension plans. Among those people who had reviewed their pension plans, 41% were unable to say whether they had selected the ‘default’ option offered by their pension provider.
More than a third said they had chosen the default investment option, meaning that they relied on the pension provider to select their plans and funds for them. Of those who had selected the default option, 38% rated the advice and explanation around the default process as either poor or non-existent.
While the majority of non-retired adults said they did consider it their responsibility to ensure that they understood how their pension fund was invested, 45% of those surveyed said that they had never looked into it. When asked about the last time they had made a change to their pension and investments in order to better reflect their risk profile, 38% of respondents said they had never made such a change, while 5% said they had done so, but more than 10 years ago. The survey figures suggested that for those who had reviewed their plans, the average time lapse since doing so was 2.4 years.
The research also shows that people are increasingly turning to friends or family for advice on their pensions while the number of people turning to financial advisers remains flat. Nearly one in four non-retired respondents (23%) – equivalent to 8.4 million British adults – selected a friend or family member from a list of preferred advisers on pension assets, up sharply from 15% in the 2011 Barings survey. The figures for those aged 18 to 24 are even more acute with well over a third (37%) asking friends or family – far higher than the 25% that turn to a financial adviser or accountant.
Overall though, the research findings suggest that professionals such as independent financial advisers or accountants remain the most popular source of advice and information about pension plans, with 34% recorded as selecting them as the preferred option.
If you have any pension arrangements that you feel have been neglected or that "could do better", please contact Ivan or Adrian. We will usually ask you to sign a "Letter of Authority", so that we can issue a detailed questionnaire to your pension company, before providing you with specific advice.
They are, without exception, unfailingly courteous and efficient. Requests and enquiries are promptly dealt with.Dr M - Cheshire