You get a statement every year from your pension company – but do you really know where your money is going?
Recent upheaval in the stock markets has highlighted the importance of regularly reviewing the performance of your pension.
Setting up a pension in the first place can be confusing enough, with the huge number of different options available. Committing to a monthly pension contribution is a great start, but unless you then keep your pension under regular review you may not achieve the retirement that you want.
Pensions are long-term investments and it is very likely that you will need to make a number of changes to your pension over the course of your working life. Changes in job, salary, financial circumstances or tax status could all have an impact on your pension choices.
Fund performance can vary wildly over time, even for very similar funds, and a fund which performed well 5 years ago could easily now be at the bottom of the chart.
Your choice of investment can also change over time. As you approach retirement, it is usually sensible to move your pension funds into more cautious investments, so that you are at less risk of a sudden fall in the stock market.
It is just as important to review pensions that you are no longer contributing to, as it may make sense to merge them together or move money out of a poorly performing fund.
You also need to ensure that your pension is still in line with your plans for retirement; otherwise you could find yourself having to work a lot longer or make huge contributions later in life.
For a free guide to your pension options, or for further advice, contact Emma Greer; tel 07885 407604 or e-mail [email protected].