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Seven pension traps to avoid

The pension changes were introduced on April 6 and this has put them very much at the forefront of public thinking. As we mentioned in our rundown of the 10 common pension myths, however, many still find pensions a confusing and complicated subject and navigating your way around them can be tricky. They’re an intricate area in the first place and so you don’t want to get caught up in some of the pension complacencies that are easy to settle in to.

For example…

  • Do you know how much it costs to purchase a sufficient income in retirement? You might be surprised to learn that it often costs more than you think, as a 70 year old male wishing to purchase an annuity with a fund of £100,000 is currently only able to secure a standard annuity income of approximately £6,000 per annum*.
  • Annuities are a complex area in themselves. For instance, alongside standard annuities there are enhanced annuities and variable annuities. Depending on the annuity you choose, your retirement income could be influenced by a number of factors. This more broadly highlights that it’s important to understand all the options available.
  • As life expectancy increases, more and more people are enjoying retirement for longer. With this in mind it’s possible to underestimate how long you might need an income, and this is particularly relevant if you have decided to purchase an unsecure income such as drawdown, which needs to be carefully monitored.

There’s a lot to consider and you should work out your goals to ensure you know what you will need in retirement and what you will require from your pension savings – call us to on 020 7189 2400 to find out more and book your free, no-obligation pension review.

What are the other traps to look out for?

With our 10 common pension myths factsheet we let you know why it’s important to separate fact from fiction when saving for retirement. Now, we suggest that there are traps to avoid when it comes to your pension. Not understanding how much you might need in retirement is just one of them. To find out what we feel are the common errors, you can download our factsheet, ‘seven pension traps to avoid’. This will jump-start your pension thinking and let you know why it’s important not to make mistakes with your retirement savings. Read it here today.

Our main aim at Bestinvest is to help our clients prepare for the future and we want to ensure that you make the most of your pension investments. Our research team is renowned and our financial planners highly qualified, and we have a range of free guides and factsheets that you can download to benefit from their expertise.  You can see the guides we have available here. If you would like more information please call on 020 7189 2400, alternatively you can request a call back or email us at best@bestinvest.co.uk

*Based on a standard annuity with no tax-free cash, 50% spouse’s pension, level in payment and payable monthly in advance. Source: IRESS

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