Best way to get the best advice about pensions, contributions etc

cre8toruk

Hi All, for reasons that I don't really understand, Pensions are in my opinion a dark art of magical mystery. In this 21st century I'm stunned by the obscurity of real information and advice that's available to us mere mortals. I once sat in a pensions meeting with my company and listened for what seemed like an eternity as the pension "adviser" waffled on about accrual rates and investment portfolios. When they asked if there were any questions I put up my hand. My question was simply this; "how much do i have to pay in, how much will I get out and how long will I get it for". 

I'm sure I'm not alone in my situation, I have quite a few employer provider pensions, from the various jobs I've done in the past (I count 8). Most of them aren't very big and the pots aren't more than a few hundred pounds apparently. One of them (no 2) is a final salary pension (or deferred defined benefit or something like that) and no 3. is biggish having had 5 years of my and the employers contributions. no 4 is a pension I've been paying into for the last few years and is not an insignificant sum.

What I'd like to know is who do I talk to that I can supply the details of all the pension plans that I have that can make some sense of what I might expect as a retirement income?
I checked the government site and apparently I can have a "meeting" with someone who will talk me through all my options unless I have a final salary pension... err which I do.

I'm in my 50's and I'm starting to think about these things as I want to make sure I have enough to live on when I come to retire. I want to know if I could conceivably retire early and what the impact that might be. 
I'd like an easy way to combine my "minor" pensions into a single plan so I don't lose money on admin fees on dormant plans.
I asked if I could transfer one plan's (no 7) pot to my current employer provided pension (provided by the same pension company) but had to give up on that as it just got so complicated....
I find it all so utterly ridiculous that has to be quite this difficult. Any how I'd be grateful for some advice on it. If I went to a financial adviser or pension adviser (same thing?) would I have to pay them ?

trevjl

I had the telephone meeting with pensionwise (which I think you are referring to) and I have a DB pension, and like you also a DC pension, so I believe you are OK to make an appointment with them

AlanP_2

If you go to an adviser you will have to pay, they don't want to work for nothing 

You may not need an adviser though. As a starting point I would suggest you list all the pensions on here with as much information as you have - Who (provider) / What (investments inside the pension wrapper) / How Much. 

It sounds like you have 7 DC (Defined Contribution) pension pots and one DB (Defined Benefit) so do the above for the 7 DC pensions.

For the deferred DB contact the administrators and ask for an up to date pension statement, and ideally a forecast for say 60 and 65 to give you an idea of what that will pay you.

Additionally go online and check your State Pension situation. Don't just look at the first number, look at the full statement as that will tell you what you are eligible for up until the start of this tax year and what you could get by the time you take it and how many more years NI you need to pay to get that maximum amount.

Once you have all this information you can then start to "estimate" how much income you could have and when from in retirement. To make this calculation meaningful you need to have a number in mind for what you need / want as an income in retirement. For example will mortgage / debts be paid off, partner's pension income, any dependent children still at home and the like.

Combining DC pensions is relatively easy and it makes no sense to keep the 7 of them separate.

dunstonh

Pensions are in my opinion a dark art of magical mystery. In this 21st century I'm stunned by the obscurity of real information and advice that's available to us mere mortals

Defined contribution pensions have the same investment options that ISAs and other tax wrappers or unwrapped investments have.   There has never been a time like now when it comes to the availability of information and data about investments.
Perhaps the issue is not the supply of information but your ability to understand the information?

I once sat in a pensions meeting with my company and listened for what seemed like an eternity as the pension "adviser" waffled on about accrual rates and investment portfolios. When they asked if there were any questions I put up my hand. My question was simply this; "how much do i have to pay in, how much will I get out and how long will I get it for". 

Easy enough to answer if it is an adviser.  Not if its an administrator for pension company as they dont have the permissions to give personalised advice.

What I'd like to know is who do I talk to that I can supply the details of all the pension plans that I have that can make some sense of what I might expect as a retirement income?

Any local IFA.

I checked the government site and apparently I can have a "meeting" with someone who will talk me through all my options unless I have a final salary pension... err which I do.

Pensionwise does not give advice.  It gives generic guidance on what generic options may exist.  It is not a bad option but they won't tell you what you should do and wont be aware of commercial options available that dont fit the generic options. i.e. they dont have a clue what providers are offering.

I find it all so utterly ridiculous that has to be quite this difficult. 

Its not difficult but it is a learning experience like any job where you want to DIY instead of using a professional.

Any how I'd be grateful for some advice on it. If I went to a financial adviser or pension adviser (same thing?) would I have to pay them ?

There is no such thing as a pension adviser.   You should avoid FAs (they work for a provider or a group of providers and have limited options).  If you need advice, it should be from an IFA.
You pay the adviser. Although the fee can be taken from the pension in most cases (which is usually the best way as you get tax relief on the fee).     If your pensions are old, they will often have commission built into them which makes them more expensive than modern options.  So, the fee could actually save you money compared to doing nothing.
The alternative is learn for yourself.

xylophone

As mentioned in post above be methodical.

State Pension Forecast.
https://www.gov.uk/check-state-pension

DB Pension
Do you receive an annual statement?
Otherwise, do you have  a Statement of Deferred benefits on leaving the scheme and a copy of the Scheme Guide?   What does it have to say about revaluation in deferment?

D C Pensions 1 - 7
List each one separately and under each heading
Current Value
Safeguarded Benefits ( basically Guaranteed Annuity Rate) Yes/No
Fees/charges

I asked if I could transfer one plan's (no 7) pot to my current employer provided pension (provided by the same pension company) but had to give up on that as it just got so complicated....

How did it get complicated?

You might like to come back with the details above for more comments.

If you require advice

https://adviserbook.co.uk/

You would tick "confirmed independent" and "pensions/retirement" when the menu comes up.

gm0

I have every sympathy with the poster.  It is not at all surprising to be shocked about this.

This is the most amazingly complex mess at this point - change layered on change over decades.  It is of course, now impossible to "just make it simple" without making a change that is radically disadvantageous for one group or another - age, prior career, public/private, wealth, db, dc.  And any change with "protection for existing age ranges planning on the current system" just makes it a little bit more complex again.  Which is pretty much exactly how we got to here.  Lots of meddling.  With transition arrangements.   A civil service classic for centuries.  Welcome to the department of circumlocution.

Life companies, Pension and investment trading companies, a layer of sales sharks waiting with poor value products.  Another layer of rogues waiting with actual scams.   Tied advice, Independent Advice, Regulations whch are there to prevent occupational scheme administrators pushing people into their own "tied" product but which as a side effect make them unable to be meaningfully helpful.  And behind all that for DC pensioners the entire financial services industry and its investment management casino lies in wait for the dumb money to wander in and be led to the expensive bets rather than the cheap ones.
Against the backdrop of the base level of personal finance education in this country the level of complexity is indeed extremely high.  If you haven't done much maths for 40 years since age 16 then the practical mathematics of drawdown is a challenge.

Hence Pension Wise, MoneyAdviceService, Pensions Advice Service.  All well intended actions to start to address this without destroying the existing market that is there as this would make things worse. 

Pensionwise lay out the main options well so for over 55s with a DC pot a chance to talk through those is a good option after some introductory reading.  Since they won't tell you what to do anyway or give overall financial advice.  Using I have a DC pot to have the "how can I take it" conversation with some explanation seems sensible.

The latest baby step from the government towards "telling people what to do" for DC drawdown is "pathways" - the government money advice site will ask how much you have and how much you want and show you some "default" providers and their headline costs and some "default" investments.  It's not terrible - in that it can help people across the chasm from "I need" to "product can" like the opera singer and the meerkat but it won't show you "the best" option by any means.  Like a "default" coat for Mr Average won't suit the skinny or the better upholstered but it would still keep you somewhat warm. The inputs are too primitive and they don't know anything like enough about your circumstances to make a well fitting recommendation.

Which leaves only 2 decent options

1) pay someone reputable and independent to do it (IFA) - but *you* still need to understand enough to be a sceptical intelligent buyer of these services.  This is only available once you have enough pension to make the fixed costs of dealing with you worth it.  Most advisers have minimums but the market is tiered.  Adviserbook will show you.

2) put the extra work in to learn the language and rules of pensions, drawdown and investments and then do it yourself.  I am doing DIY but I started several years ago spending the odd evening on it - and have put days of effort in total since - into working out my cashflow needs, what pensions we have, what the rules are, learning how to invest for the long term, how to draw, before feeling somewhat confident this was the right approach.  You can skip *most* of that with option 1. 

Or a bit of both. Some advice to set up for a fee and then perhaps run it thereafter once comfortable with it.

There are a few new companies that like to sweep up small DC pots into a tidy pile (under their management for a % fee naturally).  A lot of people come to the forum asking about PensionBee although there are plenty of outfits who will do this organising transfers step.   Be aware in all cases that the business of old pensions is paper and not very modern and digital.  Delays. And that the new (low cost) business models being tried are not long on hand holding and telephone competent customer service or dealing with problems courteously and quickly.  Especially for transfers.   Transfer problems seem to dog the whole sector and are the root of much rage expressed on Trustpilot and elsewhere about pretty much all the companies.

Good luck on your journey

gm0

https://www.moneyadviceservice.org.uk/en/tools/drawdown-investment-pathways

Here is the link to the MAS pathways tool I referred to.

cfw1994

cre8toruk said:

Hi All, for reasons that I don't really understand, Pensions are in my opinion a dark art of magical mystery. In this 21st century I'm stunned by the obscurity of real information and advice that's available to us mere mortals. I once sat in a pensions meeting with my company and listened for what seemed like an eternity as the pension "adviser" waffled on about accrual rates and investment portfolios. When they asked if there were any questions I put up my hand. My question was simply this; "how much do i have to pay in, how much will I get out and how long will I get it for". 

Hopefully some of the replies above have given you information to help.

On your first (my bold) point above, I would differ quite strongly - in this 21st Century there are many ways to find the answers to your questions, but they do need you to put some research in for yourself!  In the 1980s and 90s, it was properly hard to figure stuff out, added to which there were many cases of bad advice.   Far less the case nowadays: just the potential for criminally high fees 

On the second:  there are many, many ways money is invested, and sadly nobody (not even the many 'experts' here!) has a crystal ball to be able to give you precise answers to those questions!     No-one invests for the long term in a fixed interest account, & that would be the only way to 'know' those answers!

If you want a simple "rule of thumb", MSE advice has been to put in half your age in % terms.   Simply put, at age 30, try to invest 15% of your salary (including yours plus any company contributions).   But that is only a starting point, and you have perhaps only started taking an interest now?

Take some time to figure out what look like the several pensions you may have.   Get methodical about it - build yourself a spreadsheet. 
Maybe some are DB schemes, guaranteeing an amount from perhaps 60 or 65.   
Others may be a DC 'pot' - find out what they are invested in, what the costs are, if there are any 'guarantees'.   Then you can try to figure out how they have performed....if you find 2 or 3 look rather poor, then you can always move the DC pots to your current one, for example.

All of this takes time, which is why IFA/FAs require paying, but you can do a huge amount yourself if you have the interest - many here are DIYers, which, if done well, should save you ££££s over the years ahead.   If done badly, well, maybe you are better off paying someone 0.5-1% of the pot value to manage for you.

Albermarle

This is pretty straightforward
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