/ Money

Update: it’s time to future-proof pensions

Pensions savings

What should be done to ensure pensions really do support a comfortable retirement?

I have given evidence to the Work and Pensions Select Committee as part of its inquiry on the pension freedoms. Drawing on Which? research and insight looking at the impact of the reforms, I’ll be making the case for greater safeguards for consumers who haven’t engaged with their pensions, improved services to help consumers make informed choices and the need for better value pension products.

Pension problems

For too long the complexity of pensions, high (and often opaque) fees and charges and low engagement levels across the sector have meant that people are often not financially prepared for a comfortable retirement.

We know that while the pension freedoms have given savers more control over how they access their pension, but more choice can also mean greater risk for individuals. The sheer scale of potential harm that consumers face if they make a bad retirement decision or fall victim to a pension scam underlines the urgency of the problem.

That’s why we are launching our new pensions campaign. We want the government and regulator to ensure we have a system that gives savers the right tools, products and information to help them make the right decisions for their retirement.

The pensions dashboard

The government has already committed to the delivery of the pensions dashboard, but it remains unclear exactly how we are going to get there by the 2019 deadline while making sure it works for savers.

A fully functioning dashboard needs to provide consumers with transparent, consistent information about all of their pension pots in one place. Savers should be able to see charges, projections of values, services offered and benefits associated with each pension pot to help them make informed decisions and comparisons.

If the average consumer is expected to have 11 pension pots in their lifetime, a dashboard is only useful if all 11 are visible via the dashboard. The government needs to mandate participation of all pension schemes and recommend that the Financial Conduct Authority consults on regulating pensions dashboard providers.

Better products

However, getting the right outcomes for savers is not just about the pensions dashboard. As well as help when planning for the future, savers need to have access to better products when it comes to making those key decisions at retirement.

Part of the FCA’s review of retirement outcomes is looking at the costs and charges associated with income drawdown products. That’s why we want the FCA to introduce measures to protect savers when they take money out of their pension this way.

In a sector that already suffers from low engagement and trust, it is especially important that we address these high fees now, particularly for those who have not made an active choice in the matter. That’s why we want the FCA to introduce better safeguards for disengaged consumers at the point of retirement.

Update: 21 November 2017

Ahead of the Autumn Budget (22 November), we have called on the Chancellor Philip Hammond to set out a clear timetable for the delivery of the new pension dashboard by 2019.

How do you feel about your pension? Do you have all the information you need to save for a comfortable retirement?

Margaret says:
27 November 2017

[Hello your comment has been removed to align with our commenting rules. We don’t allow promotional content to be posted on Which? Conversation. Comments which break our community guidelines will be edited or removed. Thanks, mods]

My comment is based more on the injustice caused by the governments continuel changes to the state pension, this is costing all of us coming up to pensionable age thousands of pounds with no recourse.
When we started work and throughout our careers the pension age was 65 for Men and 60 for women in my case the new laws currently will cost me around over eight thousand pounds but for my partner currently this is Currently over sixty thousand pounds ! how can this be justified.
With regards to private pensions I agree totally that the cost for advise and implementation of the complex systems now availabile and tax implications for the unwary are totally out of order.
But I would like to see “which” also take up the cause with regards the state pension which I feel is totally unjust, it is not something the government gives us it has been paid for by ourselves over our working lives.

My sentiment exactly Mr John Blunden-Codd, born August 1954 worst apparently year to be born just lost out by 4 months also lost £50000.
I had two small pensions which I wanted to go travelling with when I turned 60, had to withdraw them to pay bills,and yes paid alot of tax for the privilege,had it not been for my husband,yes I am fortunate that my husband before /after put alot of money into his pension pot which he wanted for his retirement, now shares with me,
Guy Opperman said let them get apprenticeships to see the 1950s through to there new state pension age really ????????
I was ‘okay’at 60,4ys 5mths later now I have disability.
We paid in you pay out .

If the retirement pension for each pensioner was based entirely on what they had paid in throughout their contribution period, for many, if not all, it would mean they would be worse off than they are. Today’s pensions are paid for by today’s workers through their NI contributions and taxes. It is the number of contributions that determine the amount of the pension, not the amount paid in.

When I started work in 1965 I had no idea that my generation might still be alive and in receipt of a pension much past about the age of eighty. Those whose pensions will not start being paid for some years after they expected will hopefully live for longer than they expected and reap a bonus in extra years at no added charge.

Interesting as to the Which comments as to pensions, however, there is an elephant in the room neither seen nor heard. My wife has a pension pot in the the company Capita. It was transferred to this company by her previous employer. It was due to become active on her 65th birthday. That birthday date has now passed, she has, other than a verbal advice as to value, received nothing in writing as to how she may claim these funds. She has called Capita several times a week for in access of 6 weeks, she has even had conversations with the company to whom Capita will pass the money for investment / annuity who cannot act until Capita sign off. Every time she speaks to Capita they advise someone will call her back. Naturally they do not. This is a significant abuse but no one in the pensions industry seems to care or find it odd. Which should when making “advice” be clear as to the behaviour of these organisations. Disgraceful.

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That’s a worry, CAPITA administer many pension funds

As the victim of a Pension Scam lost 17 years service to criminals with no action from any body , regulators . Action Fraud the scammers are running rings around the authority using HMRC registration and tpr registration to facilitate the devistating crime

totally agree its a financial product designed to remove you from your money

Penny says:
7 December 2017

Biggest scam of all is State pension: my pension date was moved over 5 years in July 2012 to March2019. Since then I’ve had 2 written statements from Ministers or their representatives, lying that no State pension (+all the add-ins) date has been moved more than 18 months. That’s over £30,000 (+ they got my brother and father in laws, + my sister’s State pension, who all died before they reached pension age – not a bad little earner eh?

so money has been paid in! that means there is a capital sum sitting somewhere and it belongs to the heirs of those who died as it was not claimed by the payee at an appropriate time i.e on retirement.

There is no such capital sum, N Mitchell. State retirement pensions are paid out of current revenues, not out of accumulated funds. National Insurance is no different to a commercial life insurance policy [term insurance]; it pays out if you keep living but there is no return to the estate in the event of premature death. This balances the cost of the cover and means that contributions are affordable. Compared with life assurance, which pays out a guaranteed sum on death or in specified circumstances, life insurance premiums and national insurance contributions are relatively low.

Penny SIMPSON says:
7 December 2017

I think this whole system is deplorable. I now have four pension pots from four different employers, past & present, which now that I am on the cusp of retiring, will now all have to be looked at, analysed for type of pension, can each one be transferred / combined with another, and what is the actual process to do this, never mind any charges made. I have an appointment with one of these PensionWise counselors in the New Year, presumably to find out what ‘the process is’ in order to combine all four of them into one and then purchase an annuity, (i.e. a guaranteed pension income). Each time I have talked with each one of My Pension Schemes, they all say ‘you must speak with PensionWise first’. So I am doing this; they did in each instance seem somewhat reluctant to do what I would say is ‘talk turkey’ and tell me if I could transfer in other pension pots into their scheme, or what transferring out the value to another scheme would be either, AND believe me, none of them would tell me what the cost(s) would be. Okay, let me see what happens after the Pensionwise appointment. The whole set up stinks because I am being treated by the Government as if I was a very rich person with loads of money to consider carefully in pension schemes and therefore need advice about “all my investments”. What investments! Most work colleagues and myself just see paying into pension schemes as a way of saving for the future & getting a slightly better rate, and believe me, if I combine all my ‘PENSION POTS’ into one, it is probably less than most government FatCats make in a month; so I just find it astounding that I have to go to all this effort just to collect on any and all of these schemes that I have paid into in the first place. Being treated like I was a rich person but what I am not- yours sincerely.

Your about to be robbed, because as those who know will say “it very complicated!” it’s not complicated they have your money, they have played with your money, made a profit for themselves with your money and now they don’t want to give it up so you have to pay the penalty charge. bill of rights penalties can only be administered by a jury! no other establishment under the law can apply a penalty. Unless you agreed to it through a private contract which you did when you signed up for your pension, or the authorised person did on your behalf.

Penny – It is worth exploring whether or not it is advisable to combine your separate pensions in one scheme under one manager. In doing so, (a) look out for the future management charges, (b) see what the exit penalties are if any, (c) make sure your combined pension pot compares well with the total value of your separate funds, and (d) check how your annual income will compare with the present levels. This is what the PensionWise counsellor should do for you. There is no reason why you could not leave your four occupational pensions exactly as they are and receive an income from each if that suits your requirements, or you could amalgamate one, two, three or all four of them if the terms and conditions are right for you. Something you cannot predict is whether one or more of your existing schemes might fail in the future; although there is some protection there would probably be some detriment. That could be a good reason to consolidate under a new manager and your adviser should cover that point.

By the way, rich people would not need to be so concerned to get the best deal; for the rest of us it is sensible to make sure we do not lose more than we gain from changing our pension arrangements. In my opinion, your existing employers’ pension scheme administrators have responded to you appropriately. They cannot allow you to transfer out until you have received competent advice from independent experts in accordance with your personal circumstances. This is for your protection.

combining pension pots has one big down side that is not often talked about. If you have say 3 separate pensions you are unlikely to have all 3 disappear. But lose 1 = lose all if they are combined.

Don’t have a pension, don’t plan to start one. After putting £6k into 3 pensions between the ages of 16 and 21 and watching all three get swallowed up greedy London fat cats a pension is a bad financial product IMHO. I’ve just watched my uncle retire after putting £320k into his pension over the years. It was valued at just £120k 6 months before his retirement where did the other £200k go?
If I’m ever allowed to work again after a murderous attempt on my life and then the government left me to rot with nothing and their various departments have legally blocked my path back to work for 6 years now I will not be giving a penny more to those treacherous b******s!

Who will pay for your living expenses?

I think more information needs to be dissemniated about corporations pension fraud. We have the history of the likes of George Maxwell and the Sir Philip Green’s to learn from. Both stole their employees pension funds and many more may be doing it with impunity. Generally employees are very trusting of their employers and are not knowledgeable about their pension funds. They tend to be happy in the knowledge the employer is contributing to their pension pot. This works in favour of employers who prefer no questions asked. Employers will often extol the merits of the company’s pension fund with vague and positive language but one warning sign I know of is when the employer contacts employees a few months prior to a secretly planned merger, sale or acquisition to state they will increase employee pension contribution. The true purpose is to boost the value of the pension fund to attract better offers from bidding firms but employees won’t know this. The lure for them is in a statement that the employer contribution to the fund will also increase. Who will say no to free money? Typically, no independent advice will be organised and employees are too busy and are generally unaware of what employers are scheming. Some time after the merger/sale/take over, employees will be told they must sign up to a new pension scheme but will not be told about the full details, costs and potential loss involved. Typically they have to forfeit the employer’s contribution to their former pension fund. Everything is done in the most secretive and deceitful way and by the time employees realise, it is too late. Very few will complain out of fear.

On a matter of factual accuracy, did Sir Philip Green actually steal from the BHS company pension fund? Or did he sell the company for a derisory amount because the pension fund was badly depleted as a result of a failure to make adequate employers’ contributions over the years – a practice known as ‘taking a pension holiday’ in corporate business?

This has been a widespread practice; it obviously boosts the company’s profits and thus the dividends payable to the shareholders and the remuneration paid to the directors and top executives. Strangely there have been very few controls on this and members of company pension schemes have suffered greatly. It is the closest thing to theft not regarded as dishonest. It has gone on for many years despite the knowledge of the pension fund trustees, data given in company annual reports & accounts, statements by the pension fund actuary, and reports by the company’s auditors. Companies can get away with it because they believe the Pension Protection Fund will pick up the pension shortfalls and because the major investors are flattered by the company’s artificially inflated profit performance and assume that there will be enough asset value in the company to massage away the pension fund deficit in the event of a takeover.

I believe Sir Philip Green has offered to make a financial settlement to patch up the hole in the BHS pension fund although it might not cover all the liabilities and could leave it short in the long term. It could be forty years or more before some BHS employees are eligible to draw their pension [albeit it will only represent a short service period] by which time the responsibility for this débâcle will have faded from the memory.

Now we come to Carillion . . . yet another pension fund deficit fiasco and possibly on an even bigger scale.

Not enough legislation about COLLECTING your pension. I spent two years trying to collect my husbands pensions from several different providers, all of whom have been taken over and change their names. My pensions advisor who had sold them to us, ditched me after my husband died – that was morally and ethically wrong. They had given us the wrong advice also. How do I challenge them? My family are considerably out of pocket as a result.

I think that, in the case, of transferring pensions on the death of a spouse, there should be an automatic 10% payment from the pension company within 6 weeks of death (that’s when it is needed!) and the pensions companies should not hide behind the grant of probate (which can take some time and is not needed between spouses if there is under £325K of assets).

Simon says:
1 April 2018

we are all told to see a financial adviser before making a decision about how to set up our personal pension arrangements……

why is that many advisers seem to have little in-depth knowledge of the likely overall costs of any SIPP personal plan over say 15 year time period ?

surely they should know and understand the cost structures of the various products on the market ?

many years ago i was advised by the then government that my local government pension was not going to provide enough money for my needs at retirement so we as employees should pay more by buying AVC’s, however the only company that we could buy them from according to our employers was a blue chip company called EQUITABLE LIFE, well i paid in an extra £100 a month for years into my ACS’s only for the company to go bankrupt and leaving me with nothing, at no time then or since have i had anything from my LA employer or the company telling me what happened to my money, i was never offered a payment or anything like that in fact i got nothing not even a letter to explain what the heck had happened i just saw it on the new and had to except that my money had been stolen by others. so why can i not now get compensation from the people that advised me to take out these AVC’s and from the people that gave me no choice at all in who or which company i wanted to purchase them from other than the one they felt was the best at that time. surely i would have a case in law for being given bad advice or no real advice or choice either, does anyone know if any action could be taken or do i just have to kiss twelve years pension contributions goodbye forever. interested to hear anything others have to say as i understand that government staff got given around 60% of what they invested back by the government of the day and the NHS workers got around 40% [why i have no idea as i was not informed or contacted by anyone at the time.

If you were miss-sold your investment in Equitable Life then you should be able to get compensation provided those responsible are traceable and solvent. However, that might turn on whether there was any actual miss-selling as no one could have foreseen the melt-down that occurred when the mutual assurer was found to be grossly underfunded relative to its commitments. I believe compensation is outside the scope of the government’s Pension Protection Fund in this case and the problem might have occurred before the Financial Services Compensation Scheme came into existence [or might also be outside its scope – it would be worth checking]. However, I have seen references to a government compensation scheme that was created to deal with this particular situation.

Equitable Life closed to new policy-holders after its near collapse but has remained in business to carry on investing on behalf of continuing policy-holders and paying out on policies. The mutual assurer was recently taken over by a consolidation fund to administer its remaining assets and liabilities and it looks as though policy-holders are due to receive a bonus from the proceeds of this sale. If your policy remains in place it would be worth enquiring how you stand.

It is a shame that your local government pension provider has distanced itself from offering any assistance to its members who were advised to invest in these AVC’s. If you are in touch with any other beneficiaries of your employer’s superannuation scheme you might find a joint application to the fund, or a joint request for specialist independent financial or legal advice, would be helpful and spread the cost of investigating.

You might find the following June 2018 BBC News article a good starting point for your further enquiries –

Lynne says:
18 August 2018

A few years ago I was made redundant from my Local Government job. I got a State Pension forecast which said that I had 33 years of contributions and would be entitled to a full pension at age 62. Shortly after that, another State Pension forecast had changed the age to over 66 years. This was done without informing me, and I have dropped into a void – I couldn’t find a good job so, being a single person with a mortgage which only ended at age 64, I had to sell my home instead of waiting for it to be reposessed. I am now 62 and although I’m nearer to my new pension age, I now find that I am 3 years contributions short of a full pension. If they keep chipping away at the State Pension I will never ever have a proper home again. Currently I live in a garden room in a relative’s garden. Goodness knows what will happen to me. I feel offended that people who were born into money, and are being paid vast salaries are deciding my future, and expecting the rest of us to live in abject poverty. These politicians disgust me.

This is a very unfortunate situation and quite a number of women in your age bracket are caught up in the change of state retirement pension benefits and the moving of the eligibility ages. You must feel like you are trying to walk up a down escalator and will never reach the top. I cannot offer you any particular advice but I believe there are support groups which are trying to help, or at least explain, what is happening and how people can optimise their entitlements.

graham adams says:
17 September 2018

These politicians who are currently running the country disgust me as well. People should open their eyes as to what is really happening in this country. What will happen to the millions of people who won’t be able to retire, will they work until they die if they still have a job or end up homeless. what a reward for a lifetime of hard work and low pay! Unless you are lucky enough to have a good final salary pension or get payed lots of money your stuffed. We should demand proportional representation and make the politicians more accountable. Kick this lot out and put another party in power. With proportional representation would be easier to get any party out

A 50s lady says:
19 November 2018

How come state pensions are no where near the living wage . Pensioners still have to pay bills and feed themselves . They all aren’t as well off as this government portrays.

The basic reason is that the contributions paid towards pensions and other benefits are nowhere near enough to match the Living Wage. It has always been assumed that people will have an occupational pension or other savings and investments to provide an income in later life, or will have family who can provide support. There was also an assumption that pensioners’ costs of living were lower than working people’s because they did not have travel-to-work expenses or the costs of bringing up children. These assumptions are no longer based on reality – even if they ever were. Additional benefits are available to those with only a basic state retirement pension but that does not add much to the quality of life and will barely cover the most basic essentials.

With people living longer now, pensioners are having to fork out more than was historically the case for new clothes, new appliances and home goods, property repairs and maintenance, and other expenditure that did not even figure in the original assumptions [the internet being but one].

There are some modest reliefs like free or concessionary travel on public transport, the winter heating allowance, and the free TV licence for the over-80’s, and VAT is not payable on most essential foodstuffs, but energy costs carry VAT and other government imposts that hit those on low incomes the hardest. The costs of heating the home increase with age because more heat is required and the time spent indoors is greater.

One of the things that distorts policy is that a significant number of pensioners are very well-off and enjoy a very comfortable lifestyle. Yes, they pay higher taxes and make a good contribution to society through charitable giving and community and voluntary service but they [unintentionally] disguise the plight of the ordinary state pensioner without the lifetime benefits that they have been able to accrue.

I have never understood why child credit to working families counts for more than the support given to the retired generation.

It will be interesting to see what other commenters think on this.

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The UN has not lambasted the UK government but one of its special poverty commissioners has drawn attention to the situation. The Joseph Rowntree Foundation produced the basic statistics. I would commend the following information from Full Fact – ‘the UK’s independent fact checking charity’ –

The diagrams chart the falling percentages of poverty in the UK using both the relative poverty and absolute poverty measures.

If anyone has a remedy for poverty by any definition I urge them to come forward with it.

I agree with Duncan’s comment about “lowering taxes for the rich” but raising them does not always work either.

I am surprised that a government that wants to phase out internal combustion engines keeps freezing fuel duty. That sends out the wrong message and does nothing to help the poor who cannot even afford a car but suffer disproportionately from the emissions. It has also taken a perverse decision, because of its complete mismanagement of railway electrification, to abandon many schemes and require many bi-mode electric trains to cart heavy diesel engines around and big fuels tanks so that they can complete their journeys. How will that help the economics of the railways and reduce ticket prices to enable the poor to get to work?

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I realised it was the media who bigged the story up – I don’t take everything I read in the papers as gospel, even in the more accurate titles, because they all have a slant.

So which is the next recession, and when will it start? I think we should be told [even if it’s a media quote so long as the source is referenced]. Not more doomsaying, I hope. I have never understood the fascination with negative speculation.

Just one (important) point, Duncan. In your original post you stated:

“The UN has lambasted the UK government for its figure of 14 million”

as though it was a verified fact. By not inserting a link, you also made it appear as though it was your own work. It was only when John challenged you that you revealed the link to the Huffington post.

And the Huff is regarded as a left-leaning paper, BTW.

John Ward says: Today 11:51

I am surprised that a government that wants to phase out internal combustion engines keeps freezing fuel duty. That sends out the wrong message…

Indeed it does, and it does seem as though various government departments are – as seems so often the case – pursuing their own agendas rather than working within a cohesive policy framework.

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That’s not what I said, Duncan. I said

“By not inserting a link, you also made it appear as though it was your own work.”

In other words, by not using any of the accepted written indicators of a quote, you implied it was your own work. It’s easy to rectify: simply include any relevant link when writing something, and use quotation marks to indicate a quote. That would eliminate any ambiguity.

We don’t need a link for others’ comments – just an attribution in the text will do. I trust people to do it correctly.

These comments are in the context of the discussion about poverty in the UK and the government’s responsibility.

Ian – There is no question that continuing to freeze fuel duty instead of raising it in line with inflation is predominantly beneficial to those who drive big internal combustion engined cars and drive them fast. People in that position are by definition well-off but they are inflicting their pollution on the population at large including those who cannot protect themselves from it and for whom the government should show some consideration. This policy was pushed on the tag of “helping hard-working families”. Many of those hard-working [and low paid] families might prefer the revenue from a higher fuel duty to be spent on measures that would (a) improve their health , (b) stop it from getting any worse, and (c) enable them to do their hard work in cleaner towns and cities.

I declare an interest: our old Jag guzzles gas but we neither go fast nor far. Now that you have been switched on to electric motoring you can occupy the moral high ground – your mountain top lair elevates your position as well and gives you better breathing most of the time I hope.


I agree with you John. But I always found it fascinating that those pushing hardest for Brexit, for instance, are those rich enough that it won’t affect them. We still allow the very rich to dominate society. In so many ways.

The disgusting fact is that some of those pushing hardest for Brexit did so in a corrupt and illicit manner.

The very rich will always dominate society because becoming rich is one of the aspirations of seeking higher positions, status, office and influence, and those aspirations are usually gratified so the system becomes self-perpetuating and the techniques of climbing the ladder become disseminated among the elite.

I prefer to remain a humble, and occasionally disobedient, servant.

Single 60 yo woman. No kids so no career break. Cared for my beloved father for the last 7 years of his life and claimed carers allowance for last year. Discovered age 57.5 on social media my pension expected age of 60 will be paid at age 66. Its a disgrace that having worked since age 15 the government expects me to continue till 66. ITS A TRAVESTY. NO LETTER NO NOTICE NO PENSION. whilst we older folks work there are fewer jobs for young people. Original changes to pensions in 1995 should have been taking affect for school leavers male and female. Not a bunch of women who already had been in the workforce for 20 odd years. ITS A TRAVESTY.

Tories in denial about the report by UN Rapporteur. Kwasi Kwarteng MP completely dissed Professor Alston on Andrew Marr prog 18/11 totally disgusting behaviour by Tory MPs.

I want my pension! I paid for it and want it now!!

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Part time workers did not have a chance to join private pension schemes until the mid nineties (which, coincidentally is when it was decided to raise the Pension age to be equal with men at 65 in 2020.) It was then increased to 66 for both men and women but has left women at a huge financial disadvantage as they have never had the opportunity to save for their retirement.

This retirement hike was not widely publicised and many women still think that they will be retiring at 60, especially if they are not on Social Media or read newspapers. Knowing it would be a hugely unpopular decision it has not been blazoned across the headlines and neither were the majority of women notified personally.

Up until the mid 1970’s men were paid far more than women and it wasn’t until 1975 that the equal pay became law. By that time many women had families and were having to work part time to fit around children and caring for their elderly relatives too. The caring responsibilities has traditionally fallen on women to fulfil and this too has had a massive impact on their incomes.

We have no problem with equalisation of the pension age but to say that the quick age hike of adding 6 years on from 60 to 66 in such a short period is because of ‘equalisation’ is laughable since women have never been equal to men. Until we are all playing on a level playing field then we can not be equal and as we all know, there is still a long way to go before this becomes the case.

The ideal scenario would have been to equalise both men and women at 62.5 should they so choose and to move out of the way for the younger generation to “Get a life”. At this rate adults will be 26+ before they can get good decent jobs and leave their parents’ houses. This has far reaching social implications in the future and is short sighted with regards to caring responsibilities. I expected at 60 to be free to babysit my grand children and look after my elderly parents. Who will do this if I cant? Strangers!! This of course will cost more financially in the long run but what about the “Care” word?

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It would be interesting to learn how people think we could lower the level of poverty in the UK in an affordable and sustainable way. Totalitarian countries with collectivisation still had grinding poverty.

Sean McHenry says:
6 February 2019

I am interested in peoples views on the following, I have a final salary pension that recently closed. I have a couple of choices as I see it (1) leave the money there and when I decide to retire (some time after 55) play it safe and stick with the index linked salary or (2) take the pot and think about buying an annuity and some form of drawdown.

(2) gives me flexibility with an annuity and drawdown to fund a early retirement life stye, with the annuity providing a lesser “safe” annual salary, which I like the idea of.

(1) guaranteed, safe and index linked ……. no flexibility

Whilst it is great we have these choices now, what are Which’s / peoples view on further flexibility that would see the ability to move part of the final salary to a drawdown taking a reduced guaranteed pension from your employer? Is this having your cake and eat it? Is this likely to happen in the next 3 to 5 years?

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It’s only ‘safe’ if your pension is Government-backed, Sean. If it is, then you’ll also be given a lump sum as well as an index-linked pension. If it’s with a private company then it’s not safe – as many have discovered in the past.

If you do take it all and attempt to invest it in other ways you could do even better – but there are no guarantees.

I agree. We have the Financial Services Compensation Scheme to protect those who save with banks and building societies, and it would be good to see all pensions protected in view of what has happened to some companies. Maybe the safer option makes better sense in the present time of uncertainty.

My advice would be to take independent financial advice. We cannot possibly know all the circumstances of your position and your employer’s situation and any risk factors [especially around annuities].

Generally it is hard to beat the benefits of an index-linked final salary [defined benefit] pension scheme but, as you recognise, other options are available. These are big decisions so you deserve to have a professional assessment of the risks and rewards of each scenario. Your occupational pension scheme has closed but you might wish to consider a self-invested personal pension for your remaining working life.

Duncan – Sean’s Option (1) is the ‘safe’ option [staying in the employer’s scheme]. I don’t understand why you are recommending against it. The safe option might not be the most lucrative but it probably has the lowest risk, and a prudent approach would normally favour that option [subject to enquiries into the status and security of the employer’s fund and its management].

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Hi Sean – You would really need to seek independent financial advice. There are just so many variables to consider. We do have a money advice line which is available to Which? members.

Duncan, inaonekana kwangu kama walikuwa kuweka katika Kiingereza.

Duncan – I am not very good with obscurities of expression on serious issues so I am sorry if I didn’t fully understand your first sentence where you said “the web is full of people who now regret the safe method , stuck their money in – x-y-z and had to pay fees etc + company goes down -transferred to another company who takes fees as well”. It might not have been written in a foreign language but to me your comment was far from clear.

Now you have explained your meaning I fully support your advice to Sean.

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Pia Duncan nadhani kuwa mara ya kwanza kwa kila kitu.

PS – nilijua si kama Google ili mimi ni kwa kutumia huduma hii ya Tafsiri tovuti mbadala:


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I heard on last night’s news (although it may not be recent news) that a bitcoin holder with a “cold purse” (apparently an offline repository for the electronic currency) in Canada died suddenly aged 30-ish and no one else knows the password to the holding. It appears there is no way to recover the “money”, so thousands of people, many with their pensions “invested”, will never see their (virtual) “money” again.

I have never understood, nor tried to understand, bit coins and the like because as a dinosaur having electronic currency that is unofficially controlled puts me outside my comfort zone. I appreciate all money is somewhat virtual, and stocks and shares can plummet, but I can handle that.

So, Sean, I would find a decent Independent Financial Adviser and discuss your options. It will cost you a fee but I’d suggest when your financial future is at stake it would be money well spent.

I would like to see Which? produce a list of “Trusted Financial Advisers”. When you need professional help and have no experience of how to select a good one a Consumers Association should be able to assist, don’t you think?

Bitcoin is getting known for far worse than simply losing everyone’s cash.