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How Old Are You?

I don’t actually want you to reply and answer this question, but what has prompted me to ask you this is I have just received my latest annual Pension Statement about my Pension Fund.

Now we are all getting older. It is a fact of life. But I did come across an old school-friend of mine this week who I hadn’t seen in over 30 years. Now at first I felt fairly pleased when he came out with his initial greeting of ‘Eh up Rick lad, I haven’t seen you since we left school, you ain’t changed a bit’ (isn’t it nice to get a typical Yorkshire greeting of ‘eh up lad’!).  But afterwards reality set in and did he really mean I looked age 53, even back then?? Not such a pleasing thought after all!

Anyway, back to my recent Pension Statement. I don’t know about you, but I do find these difficult to understand, particularly when they use the various assumptions and statements about how much the fund will grow, purchase of further units, and protected and non-protected rights. Thankfully, I have an IFA (Independent Financial Adviser), I can turn to and he explains some of these confusing terms to me.

What was interesting though was something he mentioned a couple of weeks back, that I myself didn’t know about, so I thought I would share this with you. But before you ask, no he didn’t reveal to me any of the winners of the Brit Awards coming up later this month (I have heard a whisper that Olly Murs is the strong favourite for Best British Male Solo Artist).  - No, what he told me about was the actual choices people have when they wish to access their pension.

Basically the way it was explained to me, was that the Pension Fund you have built up with the Pension Company or Life Office is really just a separate Cash Fund in your name. Now as you get closer to your selected retirement age, then probably about 6 months before this date, the Pension Company or Life Office will write to you explaining what options they have available for you with this Cash Fund. (By the way, this Cash Fund is used to buy an annuity for you, and it is this that provides you with the Pension)

Now the really interesting part is that you do not necessarily have to accept their offer! It is a bit like being a judge on Strictly Come Dancing, very rarely would you choose the first couple you see dancing as your eventual winner! And so it is the same with your own Pension Pot. But you can with the help of an IFA, research the market and see if this Cash Fund can give you a better result, and hopefully a higher annual pension than you are currently being offered, here comes the important bit, – but with another Life Office. It doesn’t have to be the same one that has been holding you’re Pension pot! My IFA friend has reliably informed me that in approximately 70% of cases, a better result can be had. Now to us Yorkshire people, a better result normally means “more brass in tha pocket!”

So, the moral of this Blog is to not just to accept the current Pension offer made from your existing Pension Company or Life Office, but to shop around and just see what else your Pension Pot can buy.

Unfortunately, we at JCL (Jones Cooper Limited) are not authorised under the Financial Services Act to provide any of you out there with this level of advice, but we do know a man who can! We do have access to IFA’s (Independent Financial Advisers), so if anyone wants a second opinion on their Pensions and Pension Pot, then just contact me and we will gladly put you in touch with a qualified IFA.

Rickey

Rickey Cooper FFA, FMAAT, ATT
JCL – Jones Cooper Limited

One Response to “How Old Are You?”

  1. Tony Harwin says:

    Hi Rick, yeh good advice it’s best to shop a round abit with the help of an IFA.

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