Six pension mistakes you can’t afford to make

Accidentally putting a red sock in the white wash might be very annoying and leave you wearing pink for a week or so, but make a mistake with your pension and you could pay for it for the rest of your life. Here are six tips to help.
For context, I should say right at the outset that expecting your employer’s Workplace Pension Scheme plus your State Pension to be enough is likely to result in disappointment and financial hardship in retirement. Most people will need some form of additional pension to live comfortably when they retire.

1. Putting it off.

You know you should start saving for your future and you fully intend to but just not today. You might want to rethink this because if you put it off, it’s not just what you could have saved that you’ll miss out on. You’ll also be missing out on tax relief you could get on your pension contributions – this tax-relief helps to boost your pension fund.
How your investments perform and importantly, how long you’ve been saving for also help determine how much you have when you retire. So, if you put off saving in a pension, you’ll have to pay a lot more in to make up for lost time and you’ll miss out on the effects of potential compound growth.

2. Compound growth?

It may sound a bit complicated but, put simply, compound growth is the force that can help grow your pension fund. Think of it as growth on the growth that helps savings grow at a faster rate over time than simple growth. It’s another factor that really adds to the cost of delay in preparing for retirement.

3. Not saving enough

According to the Money Advice Service, ‘More than half of people in the UK either aren’t saving at all for their retirement or they aren’t saving nearly enough to give them the standard of living they hope for when they retire.’* But how much is enough? Well, it depends on what you want in retirement and what other savings you have.
Part of my service is helping my clients understand any provision they already have and gaining a picture of what their target is. If there is a shortfall (and there often is!) I can recommend the best way to address it.

4. Thinking your home is your pension

Come retirement, you may find yourself in the lucky position of living in a mortgage-free house that’s too big for you. You might think you will sell up to buy something smaller and use the equity left over to fund your retirement. Choosing to move is one thing – but having to is another. You may be very happy in your home and have become attached to it. If you do decide to sell-up it could take time to find a buyer at the price you need. Then there are the moving and legal costs, not to mention the inevitable stress that goes with moving home.

5. Opting out of your employer’s pension

Did you know if you opt out of your employer’s pension scheme you could also be waving goodbye to potentially thousands of pounds? That’s because when you pay in, your employer will usually pay in too – for as long as you’re still employed there. They may even match your contributions, so the more you pay in, the more they might pay in too – check your Workplace Pension scheme documents to find out what your employer will pay.

6. Not keeping track of your pensions

Do you know how much your pension is worth?  Do you know how many pensions you have or where they are? How about the type of funds they’re invested in or how much risk is involved? If any of these questions strike a chord with you, it’s time to take stock and review your pension(s).
A good rule of thumb is to check your pension savings at least once a year. Find out if your pension provision is on track to give you a retirement you’ll love by arranging a review with me.

*Source: as at June 2016.

I help my clients retire and live happily ever after. If you would like to find out whether you are saving enough for a comfortable retirement Call 01473 730 999 or email Find more details at

The value of your investments can go down as well as up, so you could get back less than you invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
This article is for general information only and not intended to address your particular requirements. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation.

Lifetime ISA – a useful boost to savings for the under 40’s

Lifetime ISAs will offer flexibility and attractive benefits for people under 40 saving to buy their first home and for retirement. Here I look at what is likely to make them attractive for younger people.

Data shows that there could be a healthy market for Lifetime ISAs, including among people saving for retirement. According to research conducted for a Scottish Widows Retirement Report, at least 46% of people in their thirties are saving for retirement outside their existing pension.

The typical extra amount these people are saving is £150 a month. This could already be in a current ISA and it suggests that a significant number of people could switch those savings into a new Lifetime ISA.

The new accounts, which will be available from 6 April 2017, will have a number of attractive benefits. They will allow people between the ages of 18 and 40 to save a maximum of £4,000 a year for retirement or to buy their first home.

Tax benefit and bonus – if you meet the criteria

Savers will receive an upfront tax benefit of 25% on all money they invest in a Lifetime ISA up to the age of 50, which is a bonus of £1,000 a year on the maximum investment. Withdrawals are also tax-free from age 60 and, assuming this benefit stays in place until they retire, it will give savers a valuable double tax relief boost.
Many people will also find the dual purpose of Lifetime ISAs attractive. Savers can use some or all of the money to buy their first home, although the properties they buy must cost less than £450,000, and keep the tax benefits. Or they can keep it until 60 and use it to supplement their retirement income.

Access to your money

Crucially, the money is not tied up – savers can withdraw it before they are 60, but if they do (unless it is to buy their first house or are terminally ill) they will lose the government bonus, and any interest or growth on this, and pay a 5% charge. The Government is also consulting on whether savers could withdraw the money with benefits intact for any other life events.

Incentive to keep your money invested until retirement.

One of the main reasons young people do not save into a pension is thought to be their concern that they won’t be able to access their money until they reach the age of 55, or even older.

The Lifetime ISA has been designed to address that concern while also providing a strong incentive to keep the money until retirement.

Not a replacement for employers’ pension scheme.

The Lifetime ISA is not an alternative to an employer’s pension or a personal pension that has extra benefits such as the employer’s contributions and tax relief.
As you see, the Lifetime ISA is quite focussed on what it aims to help savers achieve so I recommend savers take financial advice from an IFA before investing.

This article is for general information only and not intended to address your particular requirements. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation.

Financial Protection

Financial protection: can you afford not to have it?

We can never be sure what’s waiting for us round the next corner. It could be something great like a new job, a new baby or even a lottery win (you gotta be in it to win it!). But then again, sometimes life throws the unthinkable at us…

Many of us know someone who has died young or even heard of someone’s battle to survive a serious illness.  Anyone who’s seen a family trying to deal with these things will know that the financial and emotional impact can be devastating. We think it’ll never happen to us, but it could. And having protection insurance can make dealing with the consequences a lot easier.

Life cover – a financial protection if you die.
Most people who buy life cover buy just enough to pay off their mortgage if they die. But is this really enough? For most of us, our mortgage is only one of the many financial commitments we have. Credit cards, personal loans, council tax, childcare costs, food and utility bills are just some of the other regular payments that we have to make. And most of these commitments wouldn’t go away if one of the breadwinners died. More than that are all the things you eventually plan to provide for your family – would you still want them to happen, even if you are not there?

You can buy life cover that pays out as a lump sum or a monthly income to cover the bills if you have to make a claim. You can even combine both types of payment in one plan to give your family protection that pays off the mortgage and provides the income they would need to go on living in the family home.

Business owners may also benefit from putting life cover in force to the value of their share of the business. If the worst happens, their family receive the value of their share and their business partners acquire the shares. Some businesses insure the life of their key person, to cover lost profits.

Critical illness cover
Critical Illness cover provides financial protection for you and your family if you become ill with one of a long list of defined critical illnesses. If you were to become seriously ill tomorrow, what impact would this have on you and your family? And what would your priorities be? For most of us our biggest concern would be surviving the illness and recovering from it. But it can be difficult to focus 100% on getting better if you’re worried about the next big bill that’s going to come through the door. Sadly this is a reality for many families whose lives have been turned upside down by illness.

Income protection
Income protection can provide a monthly income if you become ill with an illness that may not be critical, but is severe enough to stop you from going to work for a long time. Think of it as sick pay. You may think your employer would provide that but the minimum they must provide is Statutory Sick Pay – currently around £88.45 per week.
The working world has changed dramatically in recent years. One thing remains constant however, and that’s the fact that most of us need to work to pay the bills and to enjoy all the good things in life like holidays, cars and meals out. But bills don’t stop arriving – even if we are very sick. If you fall ill or have an accident and are unable to work, the sudden loss of income could be devastating. Even if you don’t earn an income but look after the home all day, it would be very expensive to pay someone to do all the work that you do.

It might cost less than you think
How much would you pay to know that your family are protected if you die or become ill? £10 a month, £20 a month, £50 a month, or even more? Perhaps that kind of peace of mind is priceless. And given the opportunity, wouldn’t you want to make sure that your family would be financially secure?
It might cost less than you think and be more valuable than you can imagine. We’re all different. What we need, what we can afford and what protection plan is right for us depends on the life we lead. We can tailor an affordable plan to suit your own personal circumstances.
Even a little protection is better than nothing. And protecting your family isn’t only about making sure they have enough money. In the first days and weeks of coping with a life-changing event, being able to talk to an independent expert about your concerns and fears could be invaluable That’s why some protection plans now offer more than a financial payout – they offer practical and emotional help and support for the whole family if you ever have to make a claim. So if it’s a question of affordability, can you afford not to buy protection?

Find out more
We help our clients achieve peace of mind. If you would like to review your needs and current provision, please call 01473 730 999 or email Find more details at

This article is for general information only and not intended to address your particular requirements. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation.