Whether retirement is looming or you want to be prepared for the future, it is beneficial to have an idea as to what size your pension pot may be. As such a high percentage of UK pensions are currently under performing, you may be shocked by what you will actually receive when the time comes.
You are able to do this by requesting a statement from your pension provider, which should include a retirement pension forecast. Bearing in mind that your statement is only an estimate and is based on a number of assumptions, including:
• Changes to your income
• How well your pension is managed
Under performing Pension
Currently 80% of the UK pensions are under performing due to poor management, and often people are unaware until it is too late that there pension pot size is significantly smaller than what they are anticipating.
The effects of acting sooner are only amplified by the nature of compound interest; every year that goes by, that your pension is under performing, will have a massive difference to the final value of the fund. Even a difference of 1% per year, when taken into account over a long period and the effects of compound interest are taken into account, can have a huge impact on the final value of your pension fund. As an example of this, if you started with £50,000 and received a 5% return on this amount for 20 years you would receive £133,664.88 on retirement. Compare this with the same starting value and time span, this time with a 6% return per year and the final value of your pension would be over £160,000! This is a difference of 20% on the final value of the fund.
Once you have received your statement from your current provider showing your pensions forecast, if you are unhappy with the returns you are receiving or would like to explore other options available to you, complete the contact us form and one of our pension specialists will contact you to discuss further.