Posted: under Pensions and Retirement.
Tags: Credit Crunch, Pension Schemes, Starter Plan, Substantial Amounts, Tight Control
Martin Bamford asked:
It is generally accepted that we have a retirement planning crisis in the UK. The recent stock market volatility is causing more pension problems, with £19bn wiped off the value of the top 200 defined benefit pension schemes in the first half of March alone. Around 25 million of us have defined contribution pension plans - either with their employer or as a private pension plan. The value of these plans are often closely linked to stock market performance.
Here are five questions to help you work out if your finances are in good shape or battered by the credit crunch.
Do you have a pension?
If your answer is yes, move on to Question 2. If no, the seriousness of your position depends on your age and whether you have any other savings that you could use in retirement. Readers under the age of 40 still have plenty of time to build up a reasonable pension fund. But if you are older, you need to start setting substantial amounts aside now.
What type of pension plan do you have?
Employees who have the option of joining a company pension scheme to which the employer makes contributions should grasp the opportunity with both hands. For those who don’t, a cheap stakeholder plan from Friends Provident or Clerical Medical is a good starter plan. If you want to make big contributions and have tight control over the investment of your money, you could consider a self-invested personal pension (Sipp) such as the one sold by Standard Life.
When did you last check the performance of your pension?
You need to keep an eye on where your money is invested and how it is performing to make up any shortfalls as and when they develop.
What are its charges?
Since April 2001, charges on some personal pension plans have been lowered but other plans still suffer from high charges that will eat away at the value of retirement benefits.
How much do you contribute?
Most people like to think they will retire on an income equivalent to two-thirds of their final salary, but few end up with that. Check how much you need to save according to your age, salary and expected retirement age at pensioncalculator.org.uk.
Enrik
It is generally accepted that we have a retirement planning crisis in the UK. The recent stock market volatility is causing more pension problems, with £19bn wiped off the value of the top 200 defined benefit pension schemes in the first half of March alone. Around 25 million of us have defined contribution pension plans - either with their employer or as a private pension plan. The value of these plans are often closely linked to stock market performance.
Here are five questions to help you work out if your finances are in good shape or battered by the credit crunch.
Do you have a pension?
If your answer is yes, move on to Question 2. If no, the seriousness of your position depends on your age and whether you have any other savings that you could use in retirement. Readers under the age of 40 still have plenty of time to build up a reasonable pension fund. But if you are older, you need to start setting substantial amounts aside now.
What type of pension plan do you have?
Employees who have the option of joining a company pension scheme to which the employer makes contributions should grasp the opportunity with both hands. For those who don’t, a cheap stakeholder plan from Friends Provident or Clerical Medical is a good starter plan. If you want to make big contributions and have tight control over the investment of your money, you could consider a self-invested personal pension (Sipp) such as the one sold by Standard Life.
When did you last check the performance of your pension?
You need to keep an eye on where your money is invested and how it is performing to make up any shortfalls as and when they develop.
What are its charges?
Since April 2001, charges on some personal pension plans have been lowered but other plans still suffer from high charges that will eat away at the value of retirement benefits.
How much do you contribute?
Most people like to think they will retire on an income equivalent to two-thirds of their final salary, but few end up with that. Check how much you need to save according to your age, salary and expected retirement age at pensioncalculator.org.uk.
Enrik
Comments (0)
Apr 30 2008