There is a lot of negative press about pensions and in all honesty most of it is true. However, pensions can and should be an excellent investment if they are used at the right time and in the right way.
For those that have money in a pension, here are 5 ways to improve your pension:
- Make sure you have a wide range of funds to choose from that are of good enough quality. It is easy to find pensions that offer an open investment range, e.g. any fund, any shares, any ETFs, any investment trusts etc. So the choice should be 1000+.
- Make sure the pension provider charges minimal fees. I would say less than 0.50%.
- Make sure your pension is invested in line with your needs. If you are nearing retirement then think about lowering the risk you are taking with the investments. On the same note, you do not want to unwillingly enter Bonds and Gilts, being traditionally safer assets, because they might fall in value over the coming years.
- Make sure your provider offers a good administration service. This will be important when you really need it. For example when you want to change funds, can you do this online? When you want to take your pension can you choose capped or flexible drawdown, and is that cheap and easy to do?
- If you pension provider does not match up to more modern and low cost pensions that offer far greater investment choice, then move it.