I don’t know about you – but for so many of us, it’s taken a while to get to run the business we’re in now.
And most of us have had various jobs along the way!
So if you have old pensions from jobs back in the day – and you don’t really know what’s going on with them – this week’s blog is for you.
I was 14 when I got my first Saturday job.
I earned what felt like a fortune at the time – £8 for 5 hours washing up in a café. A little place, cash in hand and no perks.
Which is hardly a lot. But felt like riches, compared to the £1.40 a week pocket money my parents gave me!
Then I worked at McDonalds. Then Boots. With staff discounts, sick pay & pensions.
That was the end of employed life for me, when I then worked hard to qualify as a Financial Adviser (and the rest is history!).
But like many of my friends and clients, I know lots of women in their 30s have had several jobs before settling on their chosen career or business.
Which might mean you have loads of pensions dotted around.
I worked with one client recently – let’s call her Rachel – who had 7 different pensions. She works in IT & changes jobs every couple of years, as her contracts come to an end.
Rachel had NO idea how much her retirement savings are worth today. Or what they’d be worth when she comes to retire.
She’s completely lost track, with so many old pensions all over the place. Just a chaotic drawer, crammed full of paperwork (sound familiar?!).
Honestly, if this is you too, you’re not alone. I see it all the time and it’s completely normal, if you could do with some help to sort it all out.
But it does throw up some questions.
- If it’s all over the place – how do you keep track of the size of your pension pot?
- How do you KNOW if you’re on track for the retirement income you need?
- If you should be getting annual statements by post – do they have the right address for you? (Especially if you left that job when you were 22!).
- If you should have access to an online portal – have you ever logged in? Or even know the password?
- If you DO ever log in, does it take ages to find the right details for each account? Does it actually help you see what the numbers are or what they mean for you?
- And even then, how and where do you track all those different numbers?
Back to Rachel and her 7 pensions from her old jobs!
- We started by pulling all the numbers together and getting details of her plans so that we could get a clear picture of her starting point.
- Did any of her old pensions have any special or protected benefits? Or reasons to not move them from where they were (like built in life cover)
- And how much risk was she taking with the money she already had invested?
Risk in the investment world not quite the same as in the real world. It refers to the type of fund your money is invested in – and the wrong choice can really affect the outcome for your retirement.
Of course, there’s a whole range on the risk scale.
Some people are risk averse. They’d hide their money under the bed if they could (and let’s be honest, some people do!).
Some women are more adventurous with their money. Never careless, of course – but with more risk there typically comes more reward.
When you have a workplace pension plan, someone else usually chooses the investment funds for you. It’s based on a risk grade that they consider suitable for ‘most’ employees – a bit like a one-size-fits-no-one T-shirt.
They tend to go really low risk, so as not to risk losing employees money. Especially due to all the bad press about company pension disasters over the years.
Which makes sense in some ways – but DOES mean that after fees and charges, your old pension fund is only growing by a tiny amount. If it’s growing at all.
Some element of risk ensures your long-term savings keep up (or beat) inflation. And crucially,
it means that the money in your old pension pot is still worth something when you come to retire.
And if you have more than one old pension plan (like Rachel), you’ll have pensions with more than one provider, in more than one fund – and they could all be in different risk categories!
A good Financial Adviser can help you do a risk profile and talk through the outcomes, to help you choose where your money should be for your retirement goals. If you’re not sure on what need to do more broadly, to afford the lifestyle you want when you retire, we can help with that too.
So! Back to Rachel one last time. Here’s how it all worked out for her, with her 7 old pensions:
- We pulled them ALL together in one place. By consolidating her pensions, we gave her just one number to track – and HER choice of investment fund and risk level.
- She uses just ONE modern, online platform (no more paper annual statements, clogging up the house!). She’s able to contribute to her pension pot as an individual, so she gets tax relief. And as her business grows, her Ltd company can pay in too to save corporation tax.
- And when she finally comes to retire, she’ll have a full range of flexible ways to access her money – which certainly aren’t available on some of her older plans.
It’s so rewarding to help another happy client plan for her retirement, HER way. With no confusion, no stress and feeling in complete control of her money, knowing that it’s all taken care of.
And if we can do the same for you, I’d love to help.
When you join PATHWAY we’ll look at all your old pensions as part of the process, so that we can work out if you’ll have enough for retirement PLUS so we can make sure your money is working well for you.
Together we’ll take a look through all the income you’re expecting from your pensions, investments, property and any other sources so that we can see whether you’re on track or not.
If you have several old pensions, all you need to do is dig out the annual statement for each of the schemes.
If you’ve moved house, you might need to call them (or some are available online) and if you don’t know which provider your pension was with, you can try contacting your old employer or use the Government’s Pension Tracing Service here: https://www.gov.uk/find-pension-contact-details
You’ll be able to work through the bite-sized content in your own time, and then join me twice a week to get support and accountability and before long you’ll be on track for the retirement you deserve.
Just click here to find out more about PATHWAY
I’d love to help you work everything out and feel confident that you have the right plans in place.
Until next time,
Claire