To Pension Wake-Up Packs

Take pension advice before you retire to maximise your retirement income

Friday 13 December, 2019

Our Financial Adviser for North London, Cheshunt, Waltham Abbey and Hertford, Tracy Dove explains the benefits of taking financial advice when you approach retirement.

Take pension advice to achieve your retirement goals 

Pensions can seem like a confusing subject, as many people feel puzzled by the decisions they have to make when it comes to their pension funds. We recommend anyone approaching retirement gets personalised financial advice from one of our financial planners. For a free initial consultation call our financial planning team on 01707 872000.

New pension rules introduced from November 2019

On the 1st November the Financial Conduct Authority (FCA) introduced new rules for the pension industry which marked another change for the pension regime. The FCA want to make it easier for individuals to review their financial situation, as well as enabling pension holders to understand the options they have and any risks they may face. 

The new rules concern pension “wake up ” packs, the information a person receives before accessing their pension fund. The new rules mean the customer will receive the pack when they are due to retire. However, they will also be sent it:

  • at the age of 50 and at least every 5 years afterwards, 
  • whenever an individual requests a retirement quote, 
  • any time an individual withdraws money from their pension

New pension information will help individuals decide the most suitable pension options

The size of the packs will also be significantly reduced and contain a one-page summary of an individual’s pension and information on how to access the government’s Pension Wise service for guidance. It will also explain the advantages of reviewing different options when purchasing a retirement income option (e.g. an annuity or income drawdown) and how to do this. The main risk warnings with each pension option will also be highlighted. This will take into account the individual’s age, proposed retirement date, amount of pension savings and consider issues such as tax, pensions scams and investment risk. 

Our financial advisers recommend getting pension advice at retirement 

Tracy Dove Financial Planner in North London, Cheshunt, Waltham Abbey, Hertford & Hertfordshire said:

‘In 2015 when pension freedom was introduced people were given considerably more pension options. It has been very popular as it gives individuals choice, however in practice it is possible for people to make poor decisions, which can lead to a permanent reduction in their retirement income. I have met several people who simply don’t understand how to manage their income in retirement, and I am sure many of you have heard stories of people who have ended up paying huge sums in unnecessary tax, or even losing their pension to scams. For these reasons anyone approaching retirement could benefit from seeing a financial adviser and getting personalised financial advice. We believe that the new packs should be significantly easier to understand, and we hope they will make it easier to avoid potential financial mistakes. It should also encourage people to put more savings aside for their retirement, but we also recommend they seek financial advice as early as possible.’

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