Over the last 15-20 years many people who have accumulated various pensions have little idea of how much they are worth and how they are performing. Maintaining a number of different plans can lead to extra paperwork, more charges, inappropriate asset allocation and unintended risk exposure.

PENSION CONSOLIDATION

It is possible to avoid the above issues by consolidating all different plans into one pension plan. This will make things easier. By switching into a different but better scheme, the new pension plan could be set up in line with your attitude to risk and diversifying the investment.

The benefits can be summarised as follows:

COST

There will be only one set of management fees rather than paying separate charges for a number of plans.

SELECT YOUR OWN INVESTMENT STRATEGY

Select your investment in line with your risk profile and diversify them to gain the maximum benefits. By investing in fully researched funds, you will have a clear picture of your pension portfolio.

MONITOR, CONTROL AND REBALANCE

You will also be able to gain full control of your investment and be able to monitor 24/7 and rebalance as and when required.

TIME HORIZON

With the availability of a wide investment choice, you will be able to judge whether your retirement objectives are on target. If not, all necessary adjustments can be made before it’s too late.

ONGOING ADVICE

This is where our ongoing investment advice becomes very helpful.

USE OF PENSION FUNDS

In the current ‘Credit Crunch’ climate many business owners may find it difficult to raise funds from their bank. These business owners may have built up substantial funds within their pension scheme. It is perfectly fine to use these funds if they have a pension scheme known as ‘Self Invested Personal Pension (SIPP). They can switch their existing pension funds into SIPP. Just for your information any fund invested under SIPP, can be utilised to purchase a commercial property up to 50% of the fund value.

For business owners who own their own premises, SIPP can purchase their building using the funds from the old policies which can then be released to the property owner. The transaction allows them to release equity whilst still enjoying the use of the premises. If the SIPP has insufficient funds to purchase the property it may be able to borrow the necessary funds from the high street banks.

The business then pay 100% tax deductible rent to their SIPP for the use of the premises. The rent accumulates tax free in the SIPP generating an immediate healthy return in the fund with the prospect of tax free capital growth in the future.

There are many issues connected when considering switching of an existing pension scheme to another scheme, be it a Personal Pension or SIPP.

Therefore in order to justify whether a switch should take place or not, we need to check all the benefits available from the current scheme, obtain full information from the present product provider, compare these against the new scheme, generate a report and when everything looks favourable, only then should a decision be made to switch over.

Pension is a complex issue and therefore must be approached with caution.