The Importance of Reviewing your pension

The Importance of Reviewing your pension

2 min read
By : Tom La Dell

Thoughts and considerations about your pension and retirement funds are rarely on anyone’s new year to-do-list. However, we believe there are 6 key reasons why reviewing your pension should be one of your New Year’s Resolutions.

1. Pension Costs

All pension funds have some costs associated with them, the question is, do you know how much you are paying and what you are paying for? Charges can eat away at your investment returns so it’s vital that you are getting good value for money. Understanding your costs, and the impact these could have on the future value of your pension is critical.

2. Risk


Are you comfortable with the risks associated with your pension’s funds? Everyone has a different view of risk, and everyone’s tolerance levels will vary. It is essential you understand the risks you are taking and make sure they are appropriate for your personal circumstances to avoid getting caught out.

3. Performance

Do you know how well your pension funds are performing? Risk and return are related, the more risks we take the greater the potential returns. Likewise, the greater the risk the greater the chance of loss. It is important however to assess whether the risks you are taking are being appropriately rewarded. If not, it may be a time to rethink your investment strategy.

4. Tax

Are you making the most of Pension Tax Relief? Pension contributions are a great way of reducing your income tax liability or corporation tax liability for business owners.

5. Childcare

Are you making the most of the Governments child care support? Personal pension contributions can be used to help individuals with income between £50,000 to £60,000k retain their child benefit payment, and likewise those with income over £100k to qualify for the government's tax-free childcare savings accounts.

6. Inheritance Tax & Death Benefits

Pension pots can now be left to a nominated beneficiary on death. As they are exempt from Inheritance Tax this can be an efficient way to pass assets from one generation to another. However, since pension freedoms were introduced in 2016, not all pre-existing pension arrangements can facilitate this tax efficient transfer of funds, meaning the assets within that pension may become liable to Inheritance Tax.

Speak to a professional advisor today!

At Hentons Wealth Management we understand that everyone is unique and that we all have different goals and aspirations for the future. Collectively our team has over 100 years’ experience and has a wealth of knowledge to provide our client base with the advice they need.

We offer all our clients a free initial consultation. This allows us to understand more about your current circumstances and plans for the future and explain how we work and where we can add value.

So, if this sounds of interest, and you keen to review your pensions to make sure they are working the best for you, then please contact us today. .

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