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Scattered pension pots make expat financial planning difficult
| Published: | 27 Dec at 6 PM |
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New research has revealed that more than half of the total number of workers have two or more pensions, and those over 51 have four or more, making financial planning in retirement less than straightforward.
The survey was undertaken as a response to the system proposed by pension minister Steve Web of migration of occupational pensions into a single fund. Many thousands of those in occupational pension schemes either abandon them when they move jobs or have no idea who is managing the fund or how to access their details.
The survey results proved the scheme would be popular with at least half of retirement savers, as it would be far easier to manage and keep track of. However, problems with concerns that a new scheme might not perform as well as the previous scheme were mentioned by over 80 per cent of the respondents.
Over 86 per cent of those surveyed said they would be concerned over transference of their pension into a scheme with higher charges, and 89 per cent of respondents over the age of 55 shared the same concerns. However, experts are recommending workplace pensions as they often give extra benefits for less costs than private schemes.
Auto-enrolment is expected to result in a rising number of small-pot pensions, with the accompanying risk of charges quickly eroding the amount due. Consolidating small-pot pensions into a larger fund reduces the risk, but high charges for moving pensions need to be considered as well.
Expats coming up for retirement are strongly advised to consolidate smaller funds for the practical reason of being able to track them more easily. However, care needs to be taken as to the quality of advice given by local financial advisors as their commissions can be more important than their clients’ financial well-being.
The survey was undertaken as a response to the system proposed by pension minister Steve Web of migration of occupational pensions into a single fund. Many thousands of those in occupational pension schemes either abandon them when they move jobs or have no idea who is managing the fund or how to access their details.
The survey results proved the scheme would be popular with at least half of retirement savers, as it would be far easier to manage and keep track of. However, problems with concerns that a new scheme might not perform as well as the previous scheme were mentioned by over 80 per cent of the respondents.
Over 86 per cent of those surveyed said they would be concerned over transference of their pension into a scheme with higher charges, and 89 per cent of respondents over the age of 55 shared the same concerns. However, experts are recommending workplace pensions as they often give extra benefits for less costs than private schemes.
Auto-enrolment is expected to result in a rising number of small-pot pensions, with the accompanying risk of charges quickly eroding the amount due. Consolidating small-pot pensions into a larger fund reduces the risk, but high charges for moving pensions need to be considered as well.
Expats coming up for retirement are strongly advised to consolidate smaller funds for the practical reason of being able to track them more easily. However, care needs to be taken as to the quality of advice given by local financial advisors as their commissions can be more important than their clients’ financial well-being.
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