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Pension advice when company goes insolvent

If My Employer Goes Bust, What Happens To My Pension?

By | Pension Advice | No Comments

For those of us employed in the private sector, this can be a particularly worrying thought and stimulant to seek pension advice. After all, if your employer is the one paying into your pension, what happens if they run out of money to put into it?

Of course, the kind of pension you have with your company matters enormously. If you are on a “money purchase” or “defined contribution” pension, for instance, then you and your employer have been steadily building up your pension pot over the course of your employment.

This means that the money has already been set aside. So if your employer goes bust, you should still retain the pension pot you have been building up with your former employer’s contributions.

You would need to check, however, that your employer has actually paid contributions over to the provider of your DC scheme. From there, you could seek out new employment, and build up another pot with contributions from both you and your new employer.

If you are on a final salary scheme with your employer, however, then you will be in urgent need of pension advice if they become insolvent. Indeed, it would be a better idea to seek advice before that scenario can transpire, however unlikely it might seem.

Under a “final salary” (or “defined benefit”) scheme, your former employer promises to pay you an income throughout the course of your retirement. Typically, this income is based on factors such as your average earnings during your career, and the duration of your employment.

If you are on a scheme like this, and the company goes bust, then you certainly have bigger problems than someone who is on a defined contribution scheme. If the company that promises to pay you money in retirement is out of money, what are you to do?

Seeking independent pension advice now is a sound idea. It is likely that you will be able to work with your financial adviser to put risk-mitigating measures in place.

Or, it may actually turn out to be best to engage in a pension transfer to another scheme. One which protects the assets you have spent decades building up for your retirement. These are big questions, but worth working through with an experienced, independent specialist.


Protections For Pension Schemes

It is important to be aware of the important laws, organisations and regulations available to you when seeking out pension advice in the face of company insolvency.

One important body is the Pension Protection Fund, which pays compensation to pension scheme holders when an employer experiences a “qualifying insolvency event.”

One of the qualifying criteria for compensation, for instance, requires that the pension fund cannot meet its current and future liabilities. At this point, the PPF would get involved to make sure the pensions are still paid. It is, essentially, a kind of insurance scheme for DB / final salary pension holders.

However, be aware that there are presently caps on compensation payments. This means that you may now necessarily have all of your pension assets or income secured in the event your employer goes bust.

Since April 2015, the cap on compensation payments for those 65 years of age is £36,401.19. This assumes that members of the scheme have reached the agreed retirement age under the scheme. For those who have not reached retirement age, they can claim up to 90% compensation.


Should I Transfer To A Defined Contribution Scheme

Ultimately, this is a decision you should take only after seeking impartial, qualified independent pension advice. Everyone’s situation, financial needs and goals are different. What applies and is the right course of action for one person may not necessarily be so for you.

There are pros and cons to take into account. If, for instance, your final salary pension is worth £10,000 a year, then most of this is likely to be protected by the PPF. If however the figure is much higher, then you stand more to lose in the event your employer goes insolvent.

There is also the risk factor to consider. When you transfer from a DB/final salary scheme to a DC scheme, you essentially now bear the burden of responsibility for the investment risk. If your investments do well, then that’s great! If they do badly, however, then you might do worse under a DC scheme than you would have done under your DB scheme.

Another factor to consider is death benefits. Typically a final salary scheme will make provisions for a widow’s pension. If you are still working for your employer, they will also often receive a lump sum too. A DC pension, on the other hand, has a lot of flexibility and in many cases will pay your pension value, tax-free, to your beneficiaries.

The bottom line is, seek pension advice from an experienced, specialist financial adviser in pension transfers prior to making any decisions about a pension transfer.


Man searching online for pension advice, vulnerable to cyber attack

Is Your Pension Vulnerable To A cyber Attack?

By | Independent Pension Advice | No Comments

Could your retirement savings and investments be vulnerable to a cyber attack? The bad news is that most likely the answer is yes, almost certainly.

Think of the data held online by the occupational pensions sector (accounting for £3 trillion in assets): names, dates of birth, bank details, national insurance numbers, and more.

It’s a hacker’s dream. Particularly when you factor in that the pensions industry has been slower than other financial services sectors in addressing these kinds of attacks. There are all sorts of possible reasons for this state of affairs. One might be that scheme trustees believe other parties (e.g. scheme administrators) hold primary responsibility for cyber security. Another possible factor is that regulators have been accused of not prioritising the issue of cyber security enough.

Whatever the reasons, it’s no surprise, therefore, that leading financial companies have predicted that cyber security will be one of the leading issues faced by pension technology in 2017.

There are some important developments on the horizon, that you as a pension holder will likely want to be aware of. One is the EU’s new GDPR which is coming into effect in the UK in May of next year (General Data Protection Regulation). This will apply stringent new regulations surrounding the handling and protection of personal data, which will also apply to pension schemes.


How Might A Cyber Attack On Your Pension Occur?

However, even with the GDPR coming into effect, pension holder and those seeking pension advice need to be aware of the risks. Pension schemes need to take vigilant action to prevent a cyber attack which might have devastating effect upon their clients’ finances.

A cyber attack can take a number of forms. It might involve a security breach, where your banking details are stolen. It might involve use of fraudulent transfer requests, which lead to a loss of assets. This latter scenario might occur over the course of many years, going unnoticed and undetected until the pension scheme member seeks retirement.

Hackers and cyber criminals are well aware of the sinister “opportunity” presented to them by pension schemes. Don’t assume this is the stereotypical, hormonal teenager messing around on their laptop in his or her bedroom.

Indeed, many cyber criminals operate in highly organised groups, working together in a clandestine, almost business-like structure. One person or team might be assigned to identifying new attack opportunities, whilst others might be dedicated to assessing the monetary prize potential and target resilience.

Remember, cyber criminals only need to make one successful raid on a pension scheme to cause eye-watering, life-shattering damage to many people’s lives. Fortunately, at the time of writing there has been no major attack publicised on a pension scheme. The latter should therefore take the opportunity to take sensible, preventative measures. If they are worried about short-term losses today, they should be even more mindful of the more horrendous situation a successful attack would produce later on.


What Can Be Done?

Acting now takes several forms. The first step forward is for pension schemes to raise the issue of cyber security higher up on their agendas. The matter should be discussed alongside other business-critical matters such as budgets, deficits and investment strategies.

Another important step is to ensure that adequate, up-to-date IT policies and procedures are in place should the scheme find itself the victim of a cyber attack. There needs to be resilient communication protocols in place as well, ensuring that coordinated, swift action is taken to protect client assets and personal data. Moreover, staff and those involved in the scheme’s administration should all receive appropriate training, so they are equipped to handle a cyber attack and stay ahead of hackers.

Scheme administrators play an absolutely crucial role in protecting against cyber attacks. Indeed, regular questions need to be asked of such teams:

  • Are they aware of the risks surrounding cyber, and what preventative measures have they taken?
  • Are their IT infrastructure and systems closely monitored? Are these subject to regular, rigorous testing for attack vulnerability?
  • Is there an established scheme for incident management?
  • Is there a culture of staying up to date, and complying with, industry best practice?
  • Are there clear, resilient governance structures adequately set up?
  • Are they appropriately certified (e.g. the UK government’s Cyber Essentials Scheme).

It will also be important for pension scheme to carefully review and monitor their third party relationships. After all, hackers often like to focus their attacks on a target’s supply chain.

The frightening reality is, once an attacker gets through the wall, they can wait undetected within the system for long periods of time – waiting for the optimal, opportune moment to strike. When this eventually happens, control of the system is seized. The trustees of the pension scheme might then be threatened with a system shut down unless they yield to the hackers’ demands.

Think of how much havoc would be wreaked if a cyber attack like this happened just prior to payroll…


4 ladies discussing how to work out what your pension is worth

How Do I Find Out how Much My Pension Is Worth?

By | Pension Advice | No Comments

Your expenditure and living costs are likely to be lower at retirement than at present.

However, it’s still vitally important to find out how much your pension is worth, and how much you are likely to need at retirement.

We’ll look at the latter further into this article. First, however, to find out how much your pension is worth, you will need:

  • To figure out what your combined income, savings and investments will be when you combine your State Pension, workplace pension(s), as well as any personal pensions and other income sources (e.g. renting a property).
  • To work out the tax you will likely have to pay when you retire.
  • Establish what your living costs and expenses are likely to be.

So, how do you find out how much your pension is worth? Read on.


Work Out How Much You’ll Need, First

Pennies on the table - that's one way to figure out how much pension you will need!

There are some great resources to help you work out what your retirement expenses are likely to be. The MoneyAdviceService “Budget Planner” is a great one, for example.

The key first step is to work out what your living costs are at the moment. Add up, for instance, your car payments, mortgage payments, child expenses, food bills and holidays.

Once you have a comprehensive list of your expenditure, you’ll then need to consider how your living costs are likely to change in, and approaching, retirement.

For example, are you likely to travel more abroad? This is likely to significantly raise your yearly expenses. On the other hand, if you have children you might expect them to have left home by then. So that might off-set this added outgoing, somewhat.

Additionally, will your mortgage be paid off by that point? Will your monthly travel costs be lower, since you are no longer commuting to work?

But then, perhaps your energy and water bills are going to go up, since you’ll be spending more time at home? Are care costs likely to feature in your expenses?

Once you’ve gone through your list, outlining likely ways your living costs are going to change in retirement, you should have a much clearer idea of how much your pension should be worth in order to support your lifestyle.


Second, Work Out Your Retirement Income Sources

It is likely that your retirement income will derive from multiple sources. When working out how much your pension is worth, consider the following:

  • Will you carry on working in some capacity after you retire? For instance, at the moment many retired people are home-sitting other people’s pets when they go on holiday!
  • Will you receive any benefits in retirement, such as housing benefit, council tax reduction, or pension credit?
  • Will you get any income from renting out properties you own?
  • Will you receive any dividends from your investments?
  • Are you likely to sell any of your assets, such as property?
  • Will you have any interest? (E.g. From pensioner bonds or savings).

In most cases, UK retirees tend to receive pension income from their State Pension, their workplace pension, and possibly a personal pension.

To find out how much your pension is worth, make a comprehensive list of your retirement income sources. If you’re unsure about what kind of pensions you have, or what they mean, see our helpful guide on pension types here.

Then, it’s time to move to the next stage.


Then, Work Out How Much Your Pension Is Worth

Old man asking how much his pension is worth

This is where things can get a bit complicated. However, if you can figure out your retirement income, you will get a lot more out of working with a financial adviser. This is because they can make a more accurate assessment of your finances, and help you identify your goals.

First of all, check how much you’ve contributed to your pension pot. To do this, check the pension statement your provider sent you (they usually do this once a year).

Sometimes, providers allow you to access this information online via a personal profile on their website. If you really can’t find the information yourself, then you can try contacting your provider directly.

You will also need to factor in any other pension pots you have paid into. This might include pension pots with previous employers, for instance. Again, check your contributions and any employer contributions.

Make a note of the values you find. If you think you have lost a pension, then this government service can help you find a missing scheme.

Next, add these pension pot values to your State Pension. Make sure you check how much you are entitled to from the government (this is usually based on your age and national insurance contributions).

At this point, you should have a good idea of your pension income sources, and how much your pension is worth. From here, you should subtract the retirement expenses you identified earlier from your identified retirement income.

This should tell you whether you have enough to fund your lifestyle in retirement, or whether you are coming up short. You will also need to factor in the taxes you are likely to pay at retirement, and subtract this from your figures as well.

If you are coming up short, then you will need to make some important decisions about whether you are going to cut back on expenses, work out ways to increase your income at retirement, or both.

A financial adviser can help you work through your options here. The advisers we refer people to here at are fully regulated by the FCA, and give independent, fee-based advice to their clients. The referral from us is free, and so is the initial consultation with the adviser.

Talking is free. Remember, you don’t lose anything by getting in touch.


Ways To Increase Retirement Income

There are a few options we can suggest here:

  • Take your retirement income later. For instance, you could “defer” your State Pension.
  • Put more into your retirement pot now, or start up another pot (e.g. a personal pension).
  • Take money from your pension pot later.
Small child with glasses, parody of someone trying to understand the jargon in UK pension advice

Understanding Different Kinds Of Pensions

By | Pension Advice UK | No Comments

Busting The Jargon Around UK Pension Advice

Pensions can be a complicated subject. Hence the need for professional pension advisers! So it’s understandable many people feel bewildered by the different types of schemes, investment opportunities and technical language banded around by pension advisers and the media.

To help our users, we’ve put together this handy list of terms explaining some of the 17 most important jargon used in UK pension advice circles. We hope you find it helpful.


#1 Auto Enrolment

Abbreviated from “automatic enrolment,” auto enrolment is an initiative by the Government which requires UK employers to enrol their workers onto a workplace pension scheme. This change is being phased in, but all companies are expected to be complying by February 2018. Presently, “eligible workers” for auto enrolment count as employees aged at least 22 years old, who earn over £10,000 per year, and who work in the UK.

#2 Workplace Pension

This is a broad term to describe any pension scheme set up by an employer for their employees. They are sometimes called company pensions, or occupational pensions. There are different types of WP pensions which are covered in more detail below, including defined benefit pensions and defined contribution schemes.

#3 State Pension

Houses of Parliament, where legislation on UK pension advice and the state pension is made

The state pension is an income provided to you by the UK government in retirement, funded by national insurance contributions. It is not affected by how much you earn across your lifetime, or your marital status. Rather, it hinges on your own record of NI contributions. Presently, the law states you need to have been paying NI for 35 years to qualify for the full state pension.

#4 Annual Allowance

This is the amount of money you can put into a defined contribution pension each year, whilst also receiving tax relief. Currently, this annual allowance stands at £40,000 and applies across all of your pension schemes.

#5 Lifetime allowance

At present, there is a legal limit (“lifetime allowance”) of £1m on your pension fund’s value before it loses its tax-free status. This limit applies to your defined contribution pension schemes, as well as final salary plans. If you are set to earn an annual income of £50,000 in retirement, you face being charged 55% on any income above the cap.

#6 Defined Benefit /Final Salary Pension

Men and women traversing an office concourse. They need UK pension advice!

Under a defined benefit  scheme, an employer offers you a guaranteed retirement income. This can be based upon your salary at retirement (sometimes called “final salary” scheme), or upon your average salary over the course of your career.

#7 Defined Contribution Pension

Under a DC plan, you put a proportion of your salary into a pension pot every month. Your employer also makes contributions into the pot. Sometimes employers match their employees’ contributions up to a percentage limit. Other employers might offer a flat rate regardless of your contributions (e.g. 3% of your salary). There are many choices available to you when you have a defined contribution pot, so getting UK pension advice from a reputable independent financial advisor can be a good idea.

#8 Stakeholder Pension

A type of defined contribution pension, a stakeholder pension (SHP) must meet a minimum set of conditions set out by the UK Government. For instance, they are designed to be highly accessible to lots of different people (e.g. those on low/middle incomes), portable if you change jobs, have lower minimum contributions, and have a cap on charges

#9 Personal / Private Pension

Man and woman in a cafe discussing auto enrolment and UK pension advice

This is a kind of defined contribution pension, where you choose the pension provider and then make regular contributions to build up a pot. The provider will usually invest the pot on your behalf, and the value of your pot at your retirement will depend on the fund’s investment performance, inflation, your circumstances and your contributions.  You can set one up even if you currently have a workplace pension. When you retire, you might want to use the pot to buy an annuity, or engage in income drawdown. These are explained in more detail below.

#10 SIPP

A Self-Invested Personal Pension (SIPP) is a form of personal/private pension, where you are allowed to invest in a wider range of assets. This gives more freedom and flexibility to people who want to manage their own funds. On the flip-side, the charges can be higher than they are for personal pensions and stakeholder pensions.

#11 SSAS

A type of company pension, a Small Self Administered Scheme (SSAS) is usually available to a small number of senior staff and directors at a company. It often allows an employer much greater access to a wider range of investment opportunities for the scheme’s assets (e.g. purchasing the company’s premises and leasing them back to the business).

#12 Annuity

At the point of retirement, you might want to use your pension pot to buy an annuity from an insurance company. This is a once-in-a-lifetime transaction, which buys you a guaranteed income for the rest of your life. The income you get will depend upon a range of factors, an important one being your provider’s rate (which might be higher if you have poor health). There are different types of annuity, including “single-life” annuities and “enhanced” annuities. Speak to a qualified UK financial advisor in order to get professional pension advice in this complex are.

#13 Income Drawdown

When you retire, you are usually allowed to withdraw up to 25% from your pension pot as a tax-free lump sum. The rest, you might choose to invest and also take money from in order to provide a retirement income. This is called “income drawdown”, and is an option if you are aged 55 or over with a defined contribution pension. There are different kinds of income drawdown, including “capped drawdown” and “flexible” drawdown. The risks are also typically higher than buying an annuity, since your money is usually invested in the stock market. Again, these factors make it a good idea to consider getting UK pension advice from a specialist financial adviser if you are looking at income protection as a serious option.

#14 Estate

A beautiful home, where the residents need UK pension advice on IHT

This is the term used by the Government to describe all of your possessions, property and money. It is a particularly important aspect of UK pension advice at the point of your passing, as the value of your estate will affect your exposure to inheritance tax (explained below).

#15 Inheritance Tax (IHT)

When you die, the Government imposes a tax upon your estate (defined above). At the moment, this is usually 40% on the value of your estate above £325,000. However, there are many factors which determine how much inheritance ta (IHT) you will have to pay. It’s therefore important that you consider getting pension advice from a qualified, experienced UK financial adviser who can help you sort through the issues and identify your tax liability.

#16 Nil Rate Band

This refers to the cut-off point after which the value of your estate is subject to IHT. This cut-off point is currently £325,000 (as mentioned in the section above), and applies to each individual (meaning each partner in a marriage / civil partnership has their own NRB). As of April 6th 2017, however, an additional “residence nil rate band” has come into effect. This is described below.

#17 Residence Nil Rate Band

Sometimes called the “additional threshold”, the residence nil rate band is an extra, available nil rate amount on top of the NRB described above. It applies to deaths after April 6th 2017, and comes into force when you leave your residence (or sales proceeds thereof) to your descendants after you die. This area of IHT can get incredibly complicated, especially when downsizing comes into the picture. It can therefore be a good idea to receive expert pension advice from a UK financial adviser. can refer you to someone local, regulated and experienced advisor here.

Elderly man pressing hands against the wall, talking about defined benefit pensions advice

Defined Benefit Pension Transfer Advice – A Leap Of Faith?

By | Defined Benefit | No Comments

Three decades ago, it wasn’t uncommon to speak to someone with a defined benefit pension.

Today, these schemes are rarer. An aging population and a more mobile workforce has led many companies to offer employees defined contribution schemes instead. These are commonly seen as less costly for the employer, although there are certain advantages for the employee as well.

As of April 6th 2015, UK citizens over the age of 55 have been allowed to access their defined contribution pension pots. If you hold a pension like this then you need to carefully consider getting defined benefit pension advice from a qualified, experienced financial adviser regulated by the Financial Conduct Authority. If you’re looking to speak to a local adviser with these qualification, then we can put you in touch for free.

Defined benefit plans (or final salary pensions) provide a guaranteed income to a retired person on retirement. The annual amount is usually determined by factors such as years in service at the company/organisation in question, and your earnings during your career.

Often, these schemes account for inflation and have provisions for the recipient’s spouse. Together, these features of defined benefit schemes lead many experts to argue that they are amongst the most valuable pension schemes around these days.


Pros To Consider When Thinking About Transferring

Obviously, the big advantage in transferring is the potential pension freedoms on offer with a defined contribution scheme.

Sometimes people want to access their money in their 50s, but their defined benefit scheme prohibits them from accessing it until they have reached their 60s. Others want to reduce their liabilities, and are enticed by an ETV (enhanced transfer value) where the scheme’s trustees pay. For some people, they might no longer be employed at the company with the scheme, and want to take a lump sum due to having other pensions with different employers.

Whatever your reason for thinking about a transfer, getting professional defined benefit pension transfer advice can often help you think through the issues more clearly. This may particularly be pertinent to you if you have a large pension pot, because you might be tempted to withdraw a big lump sum early without considering the true value of your defined benefit package.

Bear in mind that if your pot is worth over £30000 and you are considering a transfer out of your DB scheme, then the law requires you to seek defined benefit pension advice.

The important thing to look out for when thinking about a pension transfer is cold calling about pensions. With the rise in pension investment scams in the UK, cold calling and texts from businesses about pensions is set to be banned in the UK later this year.

So if you did not expressly ask to be contacted from a company in this way, or you do not have a pre-existing relationship with the company in question, be very careful. At, we are extremely careful with any information you might pass onto us, and will only ever refer you to a local, qualified financial adviser regulated by the Financial Conduct Authority.

One big reason many people are seeking defined benefit pension transfer advice is due to the transfer values currently on offer for DB schemes.

Xaffinity, for instance, gives the example of a 64 year old DB scheme member. In this scenario, the gentleman’s scheme entitles him to £10000 per year on retirement after the age of 65. If he was considering his transfer value in June 2016, Xaffinity claims he could have got £210000. This year, however, the figure could be as high as £241,000.

Others point to possible interest rate rises looming, which could make transfer values fall. This, it is argued, adds incentive to seek defined benefit transfer advice as soon as possible.


No one really knows what will happen, but it’s important that your decisions about a transfer are grounded in objective facts and sound, comprehensive information. If you want to talk to a professional, local and independent financial adviser about your defined benefit transfer options, then we can connect you for free.


Cons To Consider When Thinking About A Transfer

Clearly, the biggest thing you are potentially giving up when switching away from a defined benefit pension scheme is a guaranteed retirement income.

You also get a good measure of peace of mind from a DB plan, since responsibility for working out the investments lies with the scheme provider. Many people like the feeling that someone knowledgeable is looking after their retirement finances on their behalf.

When you switch to a DC scheme, you suddenly bear a lot more responsibility for discerning which investments are right for your retirement, and what strategy you should adopt for your investments and savings. It can be quite daunting and overwhelming, but that’s where seeking professional advice from a trained, qualified financial adviser can really help.

Whatever you do, do not take a leap of faith with your pension. Make sure you are as confident as you possibly can be about whether or not the decision to transfer is right for you. By seeking independent, defined benefit pension transfer advice with a financial adviser, this is certainly possible.


independent pension advice - 2 old people discussing their retirement

Planning Your Retirement With Independent Pension Advice

By | Independent Pension Advice | No Comments

Planning your retirement can be a daunting endeavour. you are faced with many questions, such as:

Should I choose a stakeholder or personal pension?
How do I effectively plan my savings?
What income streams will be available to me at retirement?
Should I delay my state pension?

In this article, we here at will outline some of your options when planning your retirement income. You will also find some help with discerning when you should seek independent pension advice from a professional financial adviser.

Getting Started – What Kind Of Help Is Available? exists to refer people to a qualified, local financial adviser. We only ever refer you to an independent financial adviser who is regulated by the Financial Conduct Authority.

Although our service is free, if you receive regulated, independent pension advice then you should expect to pay for it. However, if you are just looking for general answers to questions you have about pensions in general, you should consider visiting the Money Advice Service or the Pension Advisory Service.

How Much Money Will I Need To Retire Comfortably?

Most people will need more than the State Pension when they retire, which will give you (presently) a maximum of £122.30 per week (excluding the Additional State Pension). If you retire after 2016, then you will likely be able to claim the New State Pension.

Because most people will require more than the State Pension to live from, they will likely also need to pay into a defined contribution scheme. This builds up a pension pot in partnership with your employer over the course of your working life.

The other possibility is that you have a final salary (or defined benefit) pension, which gives you a guaranteed income from retirement onwards. However, these schemes are becoming increasingly rare.

Companies are less inclined to offer final salary schemes to employees, as people generally now live longer – increasing the strain on company budgets. In addition, people are also much more mobile throughout their careers, moving from job to job and even changing industries entirely.

Due to this shift in employment patterns, people will defined contribution pensions often build up several different pension pots with different employers. This can present some complex situations, where often people forget how many pension pots they have and how much they’ve paid into each one.

You also then face further questions, even if you have kept accurate records. Should I keep my pension pots separate, or should I amalgamate them into one? What are the tax implications of each option? This is where seeking independent pension advice can be a real benefit.

Workplace & Personal Pension Pots – What Are The Differences?

a pot representing a pension pot and getting independent pension advice

From 2018, employers in the UK must automatically enrol their employees onto a workplace pension. There are some exceptions to this requirement from your employer, however. For instance, if you are under the age of 22 and if you earn below £10K a year.

Here, your employer will make payments into your pension pot on top of what you pay. You may be able to make additional contributions if you wish, and there are special protections available to mitigate your investments against risk (e.g. in the even your employer goes bust).

For many people, setting up a personal pension in addition to their workplace pension is a viable way forward. This is a pension that you can arrange yourself, or by working with a professional offering independent pension advice. (Bear in mind that sometimes employers offer employees a personal pension as a workplace pension!).

In the case of personal pensions, your pension provider puts your money into investments such as bonds and shares. The idea being that, over time, hopefully your investments will increase in value.

The amount you eventually get from your personal pension(s) depends on a range of factors, such as how much you put in, how the investment’s funds perform over time, and how/when you decide to withdraw your money.

Different kinds of personal pensions exist, so getting help from an independent pension adviser can be really beneficial in helping you identify the best way forward for your particular situation.

However, broadly personal pensions can be distinguished by stakeholder pensions, and self-invested pensions (SIPPs). The former must meet specific conditions set down by the UK government (e.g. limits of charges), whilst the latter give you more control over the investments that comprise your fund.

Paying into a personal pension can be done in different ways. It all depends on the person, their needs and their specific goals. Generally, people tend to make regular payments into a personal pension, or commit individual lump sums.

Bear in mind that there are tax relief factors to consider when paying money into a personal pension, so seek independent pension advice from a regulated professional if you are looking to discern the best option for your retirement.

Also, if you are self employed you may particularly find it to be important to consider a personal pension scheme. After all, you are unlikely to to be able to benefit from the workplace pension contributions of an employer right now!

Old man with squash ball seeking free pension advice

Should You Seek Free Pension Advice, Or Pay For It?

By | Independent Pension Advice | No Comments

With so much readily, freely available today on the internet, it can be tempting to think you can manage your pension, investments and retirement planning without professional advice.

An important question to ask is, will the advice you are given pay for itself? The services of an independent financial adviser will often cost hundreds, if not thousands, of pounds. Will handing them this money result in more money which pays for this advice, and then some?

Certainly, a good place to start is to get free pension advice. This kind of advice obviously pays for itself, as it only costs you time and effort (and perhaps a bus fare to meet a government adviser).

For instance, by using the government’s non-paid services such as Pension Wise and the Pension Advisory Service. You can speak to an advisor over the phone, a face to face appointment, or even a web chat if you’re more tech savvy!

This is helpful if you are not familiar with the current pension rules, giving you the pros and cons for different options you face. For instance, these services can help you see the differences between annuities and drawdown, and give you some benefits and disadvantages to each (in broad terms).

However, this is essentially where the usefulness of these services ends. They cannot provide what is known as “regulated financial advice,” which will recommend a financial product or particular course of action you should take.

With this kind of advice, you have certain rights if things go wrong as a result of acting upon the advice you have been given. Free pension advice rarely, if ever, will give you these kinds of rights. This kind of advice is valuable, and so comes with a price tag.

The Rise Of “Robot” Pension Advice

With rapid advances in technology have brought a new kind of adviser into the spotlight – “robot advisers” who use algorithms, formulas and computer modelling to assist you in making decisions about your pension and retirement.

Typically, these services work by first asking you to fill in an online questionnaire. For instance, they will likely ask you about how you feel about risk, and how many years you were planning on investing for. Once you have given your answers, the robot adviser can direct you to a portfolio model which it deems suitable to your needs and goals.

These services can range in their price tag, and companies which offer them include Rplan, Simply EQ, Nutmeg and Money-On-Toast. Usually, they’ll take 1% plus investment charges. This is typically cheaper than going through a regulated, independent financial adviser directly. However, whilst your options are wider than what you get with the free pension advice routes above, your options are more limited than going through a professional intermediary.

If the advice given by these robotic services are based on your attitude to risk, as well as your financial position, then they are regulated. This gives you some protection should the advice you receive turn awry. However, make sure you fully understand your rights, and the risks involved, before setting yourself upon this kind of advice.

For some people, this kind of pension advice can be worthwhile and cost effective. However, if you want the best range of financial options to choose from, and/or your finances are quite complex, then you might need further help.

Full, Independent Financial Advice

An independent financial adviser is authorised by the Financial Conduct Authority (FCA) to advise you on investment options (e.g. individual shares and funds), as well as appropriate financial/pension products (e.g. drawdown and annuity products). They can even build a full financial plan for you, including long-term budgeting, tax planning and investing. They can also be used to monitor the performance of your finances on a regular basis, even making adjustments accordingly in light of changes in the market. exists to refer people seeking pension advice to professional financial advisers such as these. We only ever recommend you to a recommended, FCA-regulated financial adviser, and go out of our way to ensure the person you speak to is as local and relevant as possible to your needs.

The cost of a financial adviser is hard to compare, as their charges vary. Some IFAs choose to charge hourly (this can be around £200 an hour), whilst for other tasks IFAs might choose to levy a one-off fee. An initial review is, on average, about £500.

For pension advice on how to invest a £100,000 pension fund, a fee of around £1000 is fairly common. However, if you are unsure of your goals or if you do not know what you want to do with your savings, the fee can be a lot higher. Maybe even double. This is because the adviser has to put in more work to help you figure this out.

Sometimes, going through an IFA can give you preferential rates on certain financial products. If an adviser can assist you in lower the taxes you will pay in retirement, then the professional advice can certainly more than pay for itself.

Woman in care needing independent pension advice

The 5 Benefits Of Independent Pension Advice

By | Local Pension Advice | No Comments

Approaching retirement can be both an exciting and intimidating time. There are lots of decision to make and issues to sort through, not least how to approach the questions surrounding your pension pot and retirement income. Why should you seek independent pension advice however? Isn’t it possible to deal with it all yourself?

Chances are, you’ve most likely been saving over your working years into a scheme which gives you a pension pot at retirement. (That is, unless you’re on a final salary scheme – where you are paid an income based on your earnings once you reach retirement). If this is indeed true, then there are complex choices to be made concerning how to use this pension pot once you retire.

Many options are available to you, but many of them are difficult to understand and navigate. This makes seeking independent pension advice a sound course of action. Indeed, before you even get to this point you may need to answer the question of whether you can even afford to retire.

It gets even more tricky if you have many different pension pots. Should you bring them all together in some way? Moreover, what kind of State Pension will you be entitled to?


Pension Rules – Old vs. New

In previous years, once you had taken your cash (tax free) from your pension pot, the next requirement was to buy an annuity with the rest of the money. This would then give you a guaranteed income for your remaining years.

However, since 2015 new rules have been introduced which mean you are not restricted to buying an annuity with your remaining pension pot. You can use the money in any way you like. This obviously means more choice and freedom for pensioners, but also presents many complexities. As a result, many more people are seeking independent pension advice in order to help them identify their best options for maximising their retirement income.


Types of Independent Pension Advice

It’s important to understand that not all financial advice is the same. You can receive different types of service from a financial adviser, and different kinds of financial advice bestow you with various levels of protection. It’s important to understand this before acting on the adviser’s advice, as you will need to know what rights you have in the event something goes wrong.

Usually, when you first speak with a financial adviser they conduct some fact-finding exercises in order to ascertain important things about you. After all, they need to know your background, financial affairs and financial goals if they are to give you the best independent pension advice.

It’s vital that whatever financial advice you receive, that it is suited to your personal situation and circumstances. If it is not, you do have legal protection and should be able to complain that the adviser mis-sold you. If you complain and are unsuccessful, you can always take your complaint further to the Financial Ombudsman Service.

However, your motivation for seeking independent pension advice shouldn’t mainly be about protection. It should be about making the best choice out of the range of options available to you. By working with a financial adviser, you will be able to access far more products and choices than if you were to do things yourself. They will also have experience and qualifications in the specific subjects you’re dealing with.


Why Payment Matters

Even in our internet-dominated age where we have come to expect so much for free, most things of value simply cost us. ( is an exception of course! We put you in touch with a qualified, local financial adviser suitable for your needs – completely free).

Advisers need to make a living and their independent pension advice is highly valuable. Consequently, you will have to pay to receive this quality of advice. However, you are entitled to know the adviser’s fees and how much their recommended advice will cost before you proceed with any transaction.

Be careful when buying direct without advice. Sometimes it is possible to save on the broker / intermediary fees, but often there are hidden charges which are hard to spot. Often, these charges mean you aren’t paying much different from what you might have paid if you’d received independent pension advice from an adviser.

One possible route might be to compare the costs of going direct with the costs of receiving professional financial advice. From there, you might be able to make a more informed decision.


How Payment Works When Receiving Independent Pension Advice

There have been some important changes to the rules surrounding financial advice in the UK. Advisers are no longer allowed to receive a commission on the pension products they recommend. Rather, they must charge a fee. This is arguably good news, as it removes the incentive for advisers to sell financial products which give them a higher commission, but which might not be suitable for the client.

Remember, your adviser must disclose their fees to you before you receive independent pension advice. Make sure you have your needs and goals clearly in mind before you talk to the adviser. If you are vague or unclear, they will find it harder to discern how much work they will need to do – and the costs involved.

Just bear in mind, the costs of working with an adviser might seem high. However, if their advice enables you to sort out a complicated problem for years or even decades to come, isn’t that a worthwhile investment?

Finally, before we summarise, make sure you also ask the adviser whether they are restricted or independent. It’s almost always better to go with the latter, as they will be able to give you a wider range of financial products to choose from. Also, ensure your adviser is FCA-regulated. At, we will only ever refer you to an independent, FCA-regulated financial adviser.

For more tips on what to look for in a financial adviser, read our article here.


Summary: The 5 Benefits Of Independent Pension Advice.

To conclude, here are the 5 main reasons to seek independent pension advice rather than try and do things on your own:

  1. You are entitled to more legal protection in the event things go wrong.
  2. You will have access to a wider range of choices.
  3. You will be able to make a more informed choice by drawing upon the adviser’s qualifications and experience.
  4. The hidden charges often involved with going direct are not always significantly lower than when you go through a broker / intermediary.
  5. You are less likely to need to re-visit your problem later, as the sound advice you receive should stand you in good stead for years to come.



Local pension adviser tips - man in the park

Things To Look Out For In A Local Pension Adviser

By | Local Pension Advice | No Comments

Choosing a reputable, local pension adviser who’s right for you can be a tricky process. After all, that’s why exists – to help remove the complexity from that decision.

An important consideration is to ask yourself what kind of advice you need. For instance, are you looking for advice on your final salary pension? Do you have a particular set of investments you need help with? Are you looking for long-term care planning, or help with a pension pot? Are you looking for pension advice in the event of divorce?

Another crucial thing to think about are your goals. What specifically are you looking to achieve with your pension or retirement income? Are you looking to retire comfortably? Travel the world for a few years? Getting these clear in your mind will be key in matching you with the right local pension adviser.

One way to find a financial adviser is to ask trusted family and friends. This can be helpful. However, the difficulty here is it’s not always straightforward to see if an adviser has done a good job. The fruits of their advice may not emerge until years later.

It’s also difficult to distinguish “niceness” from “competence.” Just because a friend or family member likes their adviser because they are “nice,” doesn’t mean they are a good local pension adviser.


Key Traits Of A Good Local Pension Adviser

One key thing you should look out for is the phrase “FCA regulated”. You should only work with a local pension adviser if they are regulated by the financial services authority. This means there are clear rules they must follow, to ensure you get the best and most impartial advice possible.

At, we only ever refer people to a FCA regulated adviser.

Another important distinction to make is between “restricted” and “independent” financial advisers.

Many financial advisers offer advice on a whole range of financial matters – offering, essentially, holistic for all (or most) of your financial needs. Restricted financial advisers might be restricted in the types of retail investment products they can offer. Or, they are limited to a select number of providers.

Independent financial advisers, however, are allowed to recommend you to a range of retail investment products, from across a wide range of providers.

At, we only put you in touch with an independent, local pension adviser. This ensures you get the widest choice possible when choosing product providers for the financial product being recommended.

Another important note. Since 2013, any adviser who deals in pensions, investments, retirement income products (e.g. annuities) and financial planning in general must charge a fee for their advice. They must also hold higher qualifications than they did previously.

Beforehand, many advisers were getting paid via commission on the products they sold. This meant that people weren’t always being referred to the best financial product for them. They were being pushed towards it because it rewarded the financial adviser with a higher fee.


How Much Do Financial Advisers Charge?

A financial adviser’s fees can vary depending on what you are being charged for, and the payment method involved. Some advisers might be willing to negotiate on the payment option you prefer:

  • Hourly rate. This can range anywhere from £75 an hour to £350 an hour. The UK average is about £150 an hour.
  • Set fee. This is often the route taken for a set piece of work, and can range from hundreds to thousands of pounds.
  • Monthly fee. A flat fee could be used here, or you might pay a percentage of the money you have chosen to invest.
  • Retainer / ongoing fee. This only applies in the case of an adviser providing you with an ongoing service. The exception is where you are using a regular payment to pay off an initial charge over time.

It’s important that any local pension adviser provides you with a copy of their pricing structure to you, prior to providing their services to you. They will even need to give you a cost for the service you require, even if it’s just an estimate.

Several factors can impact how much a financial adviser charges you, including:

  • Geography. If your financial adviser is based in a more expensive part of the UK, their fees are likely to be higher to cover their overheads.
  • Service delivery method. Some IFAs can provide their service over the phone or online. This can lower the price compared to a face to face meeting, which often takes up more time and resources. Be careful, however, that if you use this route that the advice you get comes with a specific recommendation (for your protection).
  • Who does the legwork. Some firms get a qualified, experienced financial adviser to do all the work. Others will delegate specific tasks to support staff (e.g. a financial paraplanner), which can affect the cost.
  • The adviser’s qualifications. If the pension adviser in question is highly experienced and qualified, they are likely to be more expensive. You might feel this extra cost is justified, depending on the type of advice you’re looking for.
  • Your situation’s complexity. If your particular case involves a lot of sorting through, then this will take more time. More time, unfortunately, equals more money. Minimise your costs here by putting your paperwork into good order, and by being very clear about what kind of advice you need.


Summary: Key Questions To Ask A Local Pension Adviser

So, to recap. Here are some of the important questions to put to a local pension adviser before deciding whether or not to receive their services:

  • What is your pricing structure?
  • How much am I likely to pay for this particular service?
  • Are you an independent or restricted financial adviser?
  • What services do you offer?
  • If you are not an independent financial adviser, are you able to consider products from across the market?
  • What qualifications do you hold which are above the minimum you need to hold?
  • What kind of clients do you currently have who are in a similar position to myself?
  • Will my situation require ongoing advice? If so, what are the costs involved?


Two women thinking about defined benefit versus defined contribution

Defined Benefit vs. Defined Contribution – Which Is Better?

By | Defined Benefit | No Comments

The past few decades have witnessed the rise of the defined contribution plan. Simultaneously, we’ve also seen a decline in the number of defined benefit pension schemes.

What’s the reason for this? How do the two compare anyway, and what are the pros and cons of each?

In this article, we’re going to explore the answers to those questions. Firstly we’ll look at what sets these two pension plans apart.

Second, we’ll look at why defined contribution is on the rise, whilst defined benefit has been on a steady decline. Last of all, we’ll flesh out some of the main advantages and drawbacks of each.


Defined Contribution vs. Defined Benefit

Under a defined contribution plan, employees and the employer are allowed to contribute money towards the pension plan.

An example of how this might work follows. An employer might contribute towards an employee’s pension pot based on the latter’s age, salary, and years of service with the business.

As such, a new, relatively-young employee might get the equivalent of 2% of their  annual salary from the employer, which goes towards their defined contribution pension. However, an older employee who has been with the firm 30 years might get a contribution closer to 12% from their employer.

So where does this money from the employer go, exactly? It might be invested, for instance in a combination of stable value funds, annuities, common stock, and fixed income securities.

From the employer’s perspective, they have a lot of certainty. They can calculate their contributions each year, and provided they follow their obligations in this respect, they can more or less rest easy.

From the employee’s perspective, however, there is some uncertainty. They do not know for sure what their retirement income will be once they retire, because it will depend on how their investments have performed.

A defined benefit plan, however, has some important differences to the above. First of all, this plan provides employees with a predetermined retirement benefit. Similar to the above, this is usually worked out by considering the employee’s salary and years of service.

Under this scheme, moreover, the employer is responsible for providing all contributions to the employee’s account. The advantage here for the employee is that they are guaranteed a particular income level at retirement.

The downside for the employer is that they assume the risk, because they lose out if the account underperforms. If this happens, it will mean the employer has to increase the funding they place into the employee’s account.

So, to quickly recap:

  • Under a defined contribution plan, both the employer and employee provide funding into the latter’s account. Employer contributions are guaranteed and formula-derived, yet income levels at retirement for the employee are dependent upon the fund’s performance.
  • Under a defined benefit plan, the employer provides all contributions to the employee’s account. The plan is formula-driven, and income levels for the employee at retirement are secure.


Why Are Defined Benefit Plans Declining?

In the UK private sector (and also the US), there has been a notable supplanting of defined benefit plans by defined contribution plans.

The reasons for this are controversial and up for debate, but there are few plausible explanations.

First of all, people across the western world are getting older. As such, it has become more financially difficult for businesses to provide the incomes people need for longer retirements.

Second, the workforce in the UK is a lot of mobile than in previous decades. More and more people work multiple jobs and switch careers throughout their lifetimes. It is increasingly rare to find people staying with one company or organisation throughout their working lives.

Another possible reason for the decline in defined benefit pension plans could be linked to the rise of women in the UK workforce. It is sometimes claimed that women are generally less attached to a specific employer than men, because they still tend to have a higher responsibility for care-giving.

Shifts in the UK economy’s makeup could also be a factor in this shift away from defined benefit pensions. These have often been linked to the manufacturing industry, which has declined in the UK. Defined contribution plans, however, are historically more linked to other sectors, particularly in services such as the financial sector, which has risen over the past few decades.

Finally, the decline might also be partly attributed to a fall in unionism in across western countries. Unions have historically tended to favour defined benefit plans, due to the perceived securities is offers to employees.


So, Which Plan Is Better?

You might be tempted to jump to the conclusion that defined benefit plans are the best. From the employee’s perspective, that’s certainly intuitive. However, it depends on each specific person’s unique goals and circumstances.

The big allure of defined benefit plans is the income security it provides people in old age, meaning you do not have to really worry about saving for a comfortable retirement.

However, bear in mind that under this plan, if the fund’s investments perform worse than expected, it will require the employer to increase their contributions in order to meet their commitments.

It might be tempting to think that’s not your problem. And you may be right. However, for particular companies, this might mean reining in spending and resource allocation in other areas of the business in order to meet these commitments. Previously planned pay rises, for instance, may have to be halted.

From the employer’s perspective, the defined contribution plan offers intuitive advantages. It shifts the risk towards the employee, since the employer will not be required to increase their contributions if the fund underperforms. However, this obviously isn’t an attractive offer to the employee, whose earnings at retirement are not guaranteed.

On the other hand, given that people are now more mobile in their careers, defined contribution plans can be attractive to the employer because they are generally more “portable” than defined benefit plans. Defined contribution plans are also typically more attractive to employees who want to feel like they have more control over their retirement money.

If you are considering switching your pension plan, it is always best to speak with a qualified financial adviser who specialises in your particular pension scheme.

To speak to an adviser in your area, fill out our form and we can find the right person to help you in your specific circumstances.