New Year’s resolutions for your pension
Take the time to collate all your pensions and ask for current values. You may need to track down lost pensions. I have lived in my property for ten years and I still receive pension statements from the previous owner. It’s vital you tell pension providers where you are.
Check to see where your funds are actually invested. Do they still meet your attitude towards risk?
Stock markets have risen the past 12 months so it’s best to check. You may have had 20% of your pension in high risk growth funds that have performed well and now constitute 30% of your pension. Consider re-balancing by switching your funds around to reduce the high risk/growth element back down to 20%. However, you may need to take advice.
Are your pension funds on track to provide you with the level of income you will need in retirement? There are a number of online projection tools you can use.
Don’t bury your head in the sand thinking retirement is many years away. Taking action to top up contributions now could make more of a difference than if you leave it for a few more years. You can also get a projection of your state benefit entitlement via the Money Advice Service.
Assess contribution levels
The maximum annual allowance is £40,000 per year but it is less for those drawing pension drawdown or for earnings where the total income will exceed £150,000.
The latter have a tapered annual allowance which depends upon your income so if you’re likely to be near or over this limit, assess your likely total income well before 5 April 2018 so you know what can be contributed. Don’t contribute if you have or might need Fixed Protection against the lifetime allowance.
Form of nomination
Otherwise known as an ‘expression of wish’ form. These guide the pension provider/trustees as to where you’d like any benefits paid in the event of your death. These forms are often completed when the pension is originally taken out, but people’s circumstances change and these forms should be updated regularly. Ask your pension provider for new forms and be sure to complete them.
Martin Tilley is director of technical services at Dentons Pensions Management