10 Tips to Keep in Mind when Choosing a Pension

Ensuring a comfortable retirement is becoming ever more important. As improvements in medicine allow us to live longer and healthier lives it is more critical than ever to have adequate savings. However longer education requirements and unconventional career paths often mean that many start a pension saving plan later in life. As a result of these factors, it is particularly important to choose the pension most suited to your requirements. Here are ten tips to follow when selecting a pension plan.

Gauge your needs and capabilities before you start

In general terms you should look to have two thirds of your income in retirement. Factoring in your current age, your expected retirement age and your salary, calculate how much you would need to put aside each month. Remember that most people underestimate how long they will need their pension to last them.

Shop around

With an idea of what you need and what you can afford look at as many different providers as possible to ensure you have a clear understanding of what is available.

Compare the offers and see which best suits your needs

There are many different types of pension plan designed for different people. Each one may have seemingly subtle differences that can make a big difference over the plan’s duration. Closely comparing plans to one another is a good way to gauge which is best for you.

Consider if you can afford the contributions

While you may have the money to pay the minimum contributions other obligations may arise that make those contributions unaffordable. Be sure you leave yourself breathing space in making your contributions. Determine the flexibility of a plan to increase or decrease contributions It is likely that you will have salary increases over the course of your career that will allow you to increase your contributions. However it is also possible that you will face difficult periods where you need to reduce contributions. Pension plans typically have such options as well as the option to pay in lump sums. Be sure to understand the specific requirements and flexibility of a particular plan.

Be aware of charges

There are a number of standard charges made for the management of the pension plan. The exact rate of these charges will vary from provider to provider. Providers are also likely to set penalties for issues such as non-payment of contributions.

Ensure you have full disclosure from your provider

Before you sign up for a personal pension plan your provider must supply you with a disclosure notice. This document outlines the details of your plan, charges, commission and a projection of payments the plan will provide.

Know what funds the plan will invest in

You should have a clear idea of the manner in which your pension will be invested. You should be sure to understand the level of risk involved with the fund and that you have no ethical or other objections to the particular funds invested in.

Get advice from an independent financial advisor

You should always seek the advice of an independent financial advisor when selecting a pension plan. They can not only give you guidance as to the type of plan that is best suited to you but they can also give you an objective understanding of each plan.

Never sign anything you are not completely happy with

Fundamentally a pension plan is designed to provide you with a secure future. If you are not completely happy with a plan you should never feel under pressure to sign up to it. Continue to shop around until you find a pension plan that works for you and gives you confidence.

Recent Posts

All I want for Christmas

All I want for Christmas

All I want for Christmas is . . . life cover for my family? It's not the most cheerful of subjects, but it can bring peace of mind. If you don’t know the difference between insurance and assurance, or mistakenly thought that your life insurance policy was for life,...



A full time position as a Life, Pensions and Investment Administrator Orca Financial Ltd are looking to expand our team again and are currently looking for a suitable candidate for a Life, Pension and Investment Administrator to join our existing team based in our...