How can you trust the pension advice you are given?
The Pension Transfer Gold Standard is a voluntary code of good conduct for Safeguarded and Defined Benefit Pension Transfers advice which has been set up by The Pensions Advice Taskforce. This is an industry wide representative body; whose ultimate purpose is to raise standards and enhance consumer protection in respect of Safeguarded or Defined Benefits.
Since April 2015, pension legislation allowed pension holders to draw the benefits as they wish; rather than forcing them to purchase an annuity. This has led to large numbers of individuals transferring funds out of schemes – some with defined benefits. Occasionally, this can be suitable, however, recent news surrounding the British Steel Workers’ pensions illustrates that, in some cases, unscrupulous advisers are giving inappropriate advice.
Our regulator – the Financial Conduct Authority – already requires firms to adhere to some ‘core’ principles. However, you can expect a firm that adopts the ‘Pension Transfer Gold Standard’ to exceed these requirements in their dealings with you.
Here at Investment Solutions we are passionate about achieving and maintaining the highest possible industry standards. As such, we have adopted the ‘Pension Transfer Gold Standard’, to ensure the advice you can expect meets the industries’ highest accolade. We regularly give pensions and retirement advice to clients and most recently have helped clients to find lost pensions and plan for their retirement.
In summary, by adhering to the Pension Transfer Gold Standard Investment Solutions will:
- Help you understand the implications of a transfer, so you can decide whether taking advice is appropriate, before you take it and incur any costs in doing so.
- Ensure that the advice supports your overall wellbeing in the context of your stated objectives, needs and wants.
- Use appropriately qualified technical skills to advise on whether to transfer and what to transfer into in order that you have the best chance of meeting your objectives.
- Only recommend mainstream investments from regulated investment companies (unless you are an expert investor)
- Be fully transparent and take necessary steps to ensure that you understand all the costs involved.
- Draw your attention to any Conflicts of Interest in giving pension transfer advice and how these are managed in your best interests.
- Share with you their experience and the outcomes of advising people on transfers.
The Personal Finance Society has produced a Consumer Guide if you would like to have more information.
The PFS has also written a few statements on their website which we have listed below which will explain some of the more common circumstances that cause people with safeguarded pension benefits to either leave those benefits where they are or to transfer them into a flexible pension.
Reasons some people give to leave their benefits where they are:
- This pension will be my sole or primary source of income in retirement and the fact that it is guaranteed and has built in indexation is reassuring to me
- I believe that I have a normal life expectancy so the fact that the pension will pay out until I die, whenever that might be, is important to me
- As this is my sole or primary source of income in retirement I am reassured that it will not be reduced if stock markets fall
- I have a partner who will also be dependent on this pension income, and I am pleased that it will continue to support them if I die before they do
- I am happy that, although this pension is a reduction in income from the level I earn in employment it is enough to meet my financial needs in retirement
Reasons some people give to transfer their benefits into a flexible pension:
- My retirement is likely to be a gradual affair and I expect to have varying income needs from year to year, so it is important for me to be able to vary the income I receive from my pension accordingly
- Unfortunately, I am not in good health and as a result my life expectancy is likely to be below average; I understand that a flexible pension gives greater options for my heirs and dependants
- I am planning to take early retirement – at least partially – and value the flexibility that a flexible pension can give me in this regard
- I have a range of financial assets at my disposal to support my retirement, so this particular pension will not be my sole source of income. The guarantees within this particular pension are therefore not important to me and flexible pensions give me more options.
- I fully expect to manage my various pension and non-pension assets myself and together with my adviser decide where to take income from as appropriate
If you are interested in reviewing your pension benefits or would like more information regarding anything from the above article please contact us via email at firstname.lastname@example.org or call us on 01903 214640 for an informal free initial consultation over the telephone.