Your Pension: It’s Time to Switch!
In recent years many people have baulked at switching their pension into a more productive facility because their pension provider has slammed them with hefty exit fees. In some cases, for smaller funds, the exit fees have been as much as the pension fund itself.
No more! Thank goodness the rules have changed and as many as 300,000 people with pension savings will now find that the exit fees are much reduced – limited to 1% of the fund for people age 55 or older.
Why is this such a big deal? Why not leave your pension fund exactly where it is? Put simply, most pension savings have been a disaster if measured over the last 15 years or so. I have the opportunity to review, with clients, hundreds of pensions. What do you think the average annual growth has been? Absolutely nothing, nada, zero!
That’s a disaster. It means that your pension probably isn’t even keeping up with inflation. It means your fund is not growing in real terms. It means that when you come to retire your fund won’t be big enough to provide a decent income. And it probably means you will be struggling in retirement and be unable to afford the kind of life you want.
So this is a big deal. The question is what can you do to improve your pension? The answer falls into two separate but connected parts.
The first element is to take charge and make sure that your pension is under your control, and that you can make a different kind of investment – one that will create solid, secure, constant growth for you. Around 7% to 15% a year is our own target, which may feel very out-of-reach for you now but won’t when you understand what is possible.
For this first element to work you ideally need to have a SSAS pension (Small Self-Administered Scheme). This is available to Directors of Limited Companies and Partners of LLP’s. Sadly not to the rest of us. But if you are self-employed, running your own business, then you could consider turning yourself into a Limited company and opening the option of having a SSAS.
The second option is to have a SIPP (Self Investment Personal Pension). Anyone can have one of these, which makes them easy to set up and transfer your existing fund to.
But with both SSAS and SIPP pension beware. They are not all the same. Many give you relatively little investment freedom and certainly don’t allow you to invest in the products that return 7% to 15% a year. To find out what the best options are, just get in touch.
The second element that you have to get right is the type of investments that you include within your pension. Forget mainstream shares and fixed interest securities. Both have failed to deliver meaningful returns in the period since 2000.
My investment strategy is focused on F.R.E.S.H investments – a new asset class and investment strategy which I have developed. If you’d like a complimentary copy of the F.R.E.S.H special report just ask–68 pages of essential information which can transform your investment success.
So there you have it. If you are one of the 300,000 people who were stuck with a poorly performing pension because of exorbitant exit fees, worry no more. And if you are one of the millions of pension savers who isn’t stuck because of fees, but has just not bothered to do anything about your frozen or non-performing pension then the answer is simple:
1. Move your pension fund to a SSAS or SIPP (ask me about good options).
2. Request the F.R.E.S.H investment special report and turbo charge your investment return.