The question we have all asked ourselves at one time or another and one The Clash immortalised in a song which went on to be used in a classic early 90’s jeans advert.
Should you stay where you are or go elsewhere is something the FCA has been reviewing when it comes to your pension options. Either prior to retirement or at retirement, which pension provider you decide to use becomes a very important consideration. Do you leave the funds with the company your employer has picked? Do you speak to each and every one of the pension providers you have accumulated during your working life? Does your current pension offer the best options on the market or simply the easiest route to accessing your funds?
In the June 2018 Retirement Outcome Review consultation paper, the FCA found:
94% of consumers who accessed their pots without taking advice accepted the drawdown option offered by their pension provider
This number shocked me when I first read it. In isolation it could be understandable. Pensions can be complicated areas to navigate, so you can be forgiven for taking the options that are in front of you when you speak to your pension provider. Also a good number pension providers have responded to legislation changes/the market and now offer competitive products that mean that clients may not need to make changes.
Within the same report the FCA noted that, when clients received financial advice, only “35% of customers” were advised to accept the drawdown option offered by their pension provider.
When clients seek financial advice, asking a professional advisor to look at their current provider as well as the market, 65% move to a different provider based on the advice.
This implies to me that staying where you are may not always be the best option. A few things to consider maybe: Does my current provider offer a fully flexible drawdown, or are there restrictions on how I access my funds? Do they only offer their own investment funds to pick from? Some providers offer access to thousands. Am I in a range of “default funds” that were easy for my employer to set up but may not suit me? Do they have a competitive charging structure? Will they work with me directly or will they only work through a financial advisor?
Above are just a few things to consider and by no means is that an exhaustive list. If you are in the 94% who are thinking of taking what is offered to you by your current pension provider, why not see what else is available? This decision may shape the income you rely on for some of the best years of your life, so why not take your time and seek professional advice.
We offer a bespoke service where we look to gather as much detailed information about your current position as possible. During this stage of our process we speak to your current providers and build a picture of the benefits you have built. We help you understand what you have and answer your questions to give you an informed set of choices. If it’s suitable to do so, we can then provide a professionally qualified recommendation.
You could then fall into the 65% of people who, when they seek professional advice, make an informed decision based on all of the information they need and can answer the question “Should I stay of should I go”.
If you would like to discuss your financial well-being, please contact me for an initial consultation.