Five top tips on how to boost a pension pot

Saving more is an important factor in ensuring your client has a good pension pot. However, when it comes to planning for retirement, many are not aware that getting a good deal for their pension can save thousands of pounds.

1. REDUCE FEES AND CHARGES
Most of us are used to checking charges on our credit card or mobile phone bills, but many people have no idea what their pension costs are. On average, people pay five times too much for their pension costing an average of £23,000 over 20 years.

2. TRACK DOWN A MISSING PENSION
The Government’s free Pension Tracing Service can be a good place to start for someone who thinks they could own one of the 1.6 million unclaimed pension pots. The Association of British Insurers estimates these are currently worth £19.4 billion – the equivalent of nearly £13,000 per pension pot.

3. ENSURE IT IS INVESTED CORRECTLY
A good pension will offer a wide range of investment funds, investing in different asset types and geographical areas as well as considering the appropriate approach to risk. It is especially important to review pension investment choices regularly as retirement nears.

4. CONTEMPLATE A PENSION THAT OFFERS DRAWDOWN
Flexi-access drawdown is a way of taking money out of a pension pot to live on in retirement. It can give flexibility over how and when a pension is received. Up to 25% can be taken as a tax-free lump sum. The rest of the pot remains invested, giving it the potential for investment growth.

5. CONSIDER TAKING PROFESSIONAL ADVICE
If there is any concern about not having a comfortable retirement income, it can pay to take professional advice. Research shows that, on average, UK savers improve their pension wealth by £30,991 by taking advice.

For any further information or advice, please contact Marcus Pilkington at Pareto Financial Planning at 0161 819 1311.