How well is you Pension doing?
When you save for a pension, you shouldn’t only focus only on how much you’re putting into it. You should also regularly review where your money is being invested and the growth that is being achieved.
Where is your money being invested?
Apart from Employer Pension Schemes, you will normally have to make a decision on where your money is invested. Pension providers will try to make it as simple as possible for you to decide what to do. Typically they offer a number of different investment funds, with different risk and return profiles - the more risk you accept the greater the expected return but the greater the likelihood of losses also.
They will allow you to choose the risk level that you are comfortable with and if you don’t make an active choice yourself, the pension provider will invest your money in a mid-risk fund. Also, as you get older, you should probably change to lower risk investments to reduce risk as retirement draws closer. Most people need to:
- Choose a fund that has an acceptable level of risk for them
- Understand the expected returns from the chosen fund
- Understand the charges and ensure they are competitive
- Leave the detailed investment choices to the professionals, the Fund Manager
- invest in a mix of different investments (Diversify) - UK and Global, Shares and government bonds
- Invest for the Long Term
- Annually, review your investment choice and the growth in your pension pot
To get the most from your pension, we strongly advise that you seek professional advice from a fully qualified and regulated Independent Financial Advisor. To arrange for a no obligations, initial free telephone consultation click here.