How can advice help you make the most of your pension?

Hayley Millhouse - Managing Director of OpenMoney

November 19, 2020

Do you know what type of pension you have? You’re not alone if not! Our 2020 Advice Gap Report revealed that almost a quarter (23%) of British adults are unaware of the type of pension that their employers are contributing to on their behalf [1]. It’s never too early (or late!) to take stock of your current pensions and plans for retirement.  A good place to start would be to track down the pensions you have in your name, which you can read all about in our blog, here.

Once you have the full picture of where your money is, you may be thinking about consolidating your various pension pots into one, you can read more about the benefits of consolidation here. When you get to this point, it is so important to seek regulated financial advice. There are lots of things you wouldn’t do without the guidance of an expert, for example fixing your car, so why should transferring your pension be any different?

Although it might be a good idea to consolidate your different pots into one place in order to keep track of them, provide better investment options, and potentially save on fees, it can be a complex and often irreversible decision. By taking advice, you can ensure you understand the implications of all the choices available and be confident that you’re making the right decision for you.

Transferring to another provider without advice could leave you at risk of losing potentially lucrative pension benefits with a current provider or switching to a product with higher fees. We take all of these factors into consideration when advising customers on their next steps for their pension. We actually advise a quarter of our customers going through our review process not to transfer! This is usually due to their existing pension offering valuable benefits, or that their current provider is already meeting their needs and providing good value for money.

Our Advice Gap Report also found that one in five people have more than one type of pension, which could include all types of pension such as a personal pension, final salary pension, a defined contribution work pension etc. This is totally normal as people can have a number of jobs through their working life, and may build up several pension pots from different employers. The current upheaval in the jobs market is likely to fuel this trend, so taking control of your retirement planning, to ensure you have enough money later in life, is more important than ever.

At OpenMoney, we offer a free pension transfer review, where we will check whether transferring is the best choice for you. We have been able to save customers over £30,000 in fees over the remaining life of their pensions by switching, and they also benefitted from the option to link all of their other finances via our app to get a complete picture of their financial situation. This shows just how important it is to get advice! There’s no obligation to act on  our advice, it is your pension, your decision and you are in control.

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