We are ardent advocates of reviewing your pension performance regularly. However, we also understand that you may not have the required information close at hand.
It is common for people to lose track of pensions from previous employment or private pensions they no longer pay into. This brief article aims to inform you how you can track down previous pension plans and assess your options to maximise your retirement funds. Check out Portafina for expert and regulated financial advice to help you plan for your retirement.
Where to start?
The best place to start tracking old or lost pensions is online through the government website. All you need to get the ball rolling or some basic details about your previous employment or pension provider.
If you find dealing with pensions complex or just don’t have the time, you could always engage the services of a financial advisor. They can help you locate your pensions, assess their values, and compare them to other available products.
Assessing your pensions’ values
If you have stopped paying contributions to previous workplace or private pensions, they are unlikely to have grown considerably since. However, these funds could contain a significant amount of money. Therefore, it’s in your interest to understand what each of your pensions is worth and the features and benefits they offer. This knowledge will enable you to decide whether to leave them invested where they are or switch to another product.
You might decide that you want to transfer your funds to a more modern plan. These tend to perform better and have lower charges than older pension schemes. Your pension provider can give you an up-to-date value of your pension. You can also get this by using a regulated financial advisor if this is a more convenient option.
Can you transfer your pension funds?
You can transfer your pension funds to another plan if you wish. Doing so might not just benefit you financially, as there are other beneficial features to consider. For instance, pension release regulations were introduced in 2015, enabling people to access their pension funds from age 55.
If this applies to you, you may want to consult a regulated financial advisor. They can help you service your long-term goals and retirement lifestyle requirements, then advise you on your best options.
More on pension release.
Regulations introduced in 2015 mean you now have greater freedom to access your pension funds. From age 55, you can unlock a quarter of your pension funds as a tax-free lump sum. The remaining three-quarters can also be taken as lump sums, but these get taxed at the appropriate rate.
In certain circumstances, this can be beneficial. However, you should be conscious about taking too much money too soon. Doing so could leave you short of income when you retire fully. Also, you should consider the tax burden of taking more than the 25% tax-free amount.
Also, pension release does not apply to all pension schemes. Once again, a regulated financial advisor can help you with pension release issues.
Restarting your pension contributions.
Depending on your pension plan, you might be able to restart contributions to your old pensions. However, this may not be your most cost-effective option. Before doing so, you should assess the value of your pension and its features, then compare it to what is available on the current market.
It is not uncommon for people to have lost, misplaced, or forgotten about pensions. If you are one of these people, you should track your pensions down as soon as possible. They could contain a significant amount of money, which belongs to you. Hopefully, this brief article will help you understand how to trace all pensions, assess their value, and decide what to do with them.