We are ardent advocates of regularly checking your pension’s performance. However, what if you don’t have your pension information available? Many people have lost track of old pensions and are missing a considerable amount of money.
This brief article explains how to track down old pension schemes, find out what they are worth, and decide what to do with them.
How to track down an old pension.
If you have lost track of an old personal pension or workplace scheme, it’s not the end of the world. The government has set up a page on its website to help you search for old pensions. You only need a few basic details about your pension provider or previous employment to use this service.
Although this is a straightforward procedure, many people find dealing with pensions laborious. If you’re one of these people, you may decide to use a financial advisor to help you in your pension search. Check out Portafina.
How to value your pensions.
If you have ceased your pension contributions, your funds are unlikely to have grown significantly since your last payments. However, your pension pot could still be worth considerable money.
Therefore, it is a good idea to know your pension’s value. Also, understanding the features of each plan will help you assess its overall worth. Once you have this information, you can compare them with other products.
A crucial aspect of valuing your pension plans is how much you pay management charges. Older pension schemes tend to have higher fees attached. Unfortunately, paying higher fees doesn’t necessarily mean your pension will perform better. Indeed, older pensions often perform less well because they don’t use the latest technology.
Your pension provider can give you a valuation of your pension, along with its features, charges, and performance. Suppose you find dealing with pensions dull or too time-consuming. In that case, you can consult a regulated financial advisor to investigate your pension on your behalf.
Transferring your funds to another pension plan.
Having gathered the information you need about your pension, you can choose to transfer or switch to another plan. Doing so could be beneficial if it reduces your pension’s management fees or gives you specific features.
One such feature is the ability to access your pension funds at fifty-five. Not all pensions have this, so it may be something you wish to do. A financial advisor can guide you through the process, known as pension release, and help you decide if this is your best option.
Pension Release is a relatively new feature on many pensions, introduced in 2015. The government passed legislation enabling holders of certain types of pensions to access their pension funds when they reach fifty-five.
It works like this. You can take the first 25% of your pension pot as a tax-free lump sum. You can take more than 25% as a lump sum, but you will incur a tax bill on the additional amount.
In certain circumstances, taking money from your pension pot might be beneficial. For instance, pay for a wedding, clear your mortgage, or fund a critical project.
However, you should be careful about taking too much cash. Doing so is not always your best option, and it can leave you short of income when you retire.
Also, there can be dire consequences in the tax you pay if you take more than your 25% tax-free amount. A regulated financial advisor can help you with this aspect of your retirement.
Restarting Your Pension Contributions
It is possible to restart contributing to an old pension scheme. Once again, discussing doing so with a financial advisor would be beneficial, as you may have better options.