Yesterday we published a blog post titled “5 Things You Need To Know About UK Pensions”
We cover:
What is a pension
Why pensions are important
When you can claim your pension
If the state pension is enough to live off
How you can track your lost pensions
For me, pensions were always something I knew were important but I never really took the time to properly look into them. Now I know a bit more, I’m already wishing I’d started priorisiting it earlier!
What about you? Do you take an active interest in your pension? Have you combined all your pensions into one pot?
Today sees the state pension age rise to 66 for both men and women.
But, did you know…
When pensions were first introduced in the UK in 1908 you couldn’t claim until you were 70.
Life expectancy was only 40 years for men and 43 for women, so only 24% of people reached state pension age! Those who did, typically only claimed it for nine years.
This is compared to figures from 2017 where 85% of people reach state pension age and claim for approx 24 years!
It depends on the individual; their mentality and habits. Pension is a long term investment and to save for your retirement. If you are poor with your finances in terms of savings and investing, then a pension is crucial. They should truly make the defined benefit scheme industry standard for all to have.
Doesn’t this defeat the point of diversification when it comes to investments? Other than saving on AMC and in one place, I can’t see the value add for combining?
Combining plans doesn’t necessarily mean combining investments. It’s possible to have a single plan invested in many assets/funds or many plans all invested in the same assets/funds.
The main advantages of combining are the possibility of lower fees (some small plans may be subject to high minimum fees, some plans are just plain expensive) and simpler tracking/planning (it can take some time to get forecasts from many separate pensions and combine their results to see if you’re on track).
Of course there are also risks: combining a “better” pension into a “worse” one - something to be done with caution and/or good advice.
So there are essentially two benefits to combining at I highlighted in the initial response. I’m going off-topic a bit but I think everyone is going towards under one roof and subscription-based.
