Are you pension-wise?

The world of pensions is complicated and became even more so after April 2015 with the introduction of reforms giving people approaching retirement more choices about how to use their defined contribution pension pots, including taking the whole fund as cash.

This article has been provided by Citizens Advice, the national organisation responsible for providing face to face guidance to the public through Pension Wise.

Pension Wise is a government service to help people understand the new pension options available to them. In this article our partners at Citizens Advice introduce these changes and explain how to get guidance on the options available. 

For the first time, people have the freedom to decide whether they buy an annuity, take a lump sum, drawdown money flexibly or mix their options.

Know your options

A defined contribution pension is a personal or workplace pension, based on how much money has been paid into your pot – also known as ‘money purchase’ schemes. When you take money from a defined contribution pension it comes from the money you (and sometimes your employer) saved into it over the years, plus any investment returns your money may have earned.

For the first time, people have the freedom to decide whether they buy an annuity, take a lump sum, drawdown money flexibly or mix their options.

Sadly, the new freedoms have also resulted in an increase in fraudsters and sharks targeting over 55s – putting their hard-earned retirement savings at risk.

Pension Wise is a new government service set up to help people understand the new pension options available to them. It offers free and impartial guidance to help people make informed decisions about their pension which are best for their individual circumstances. To find out more visit the government’s Pension Wise website – www.pensionwise.gov.uk.

To make a telephone or face to face appointment call Pension Wise on 0300 330 1001. Appointments last up to 45 minutes and are tailored to the individual, taking into account the value of their pension, their personal circumstances and their retirement plans. Some preparation and thinking is therefore necessary in order to get the most out of an appointment and service users are asked to bring along information about the value of their pension pot/s, their state pension forecast and to have a good understanding of their financial circumstances as a whole.

Appointments are delivered by fully trained guidance specialists, who will discuss all the options available and their features, and will help service users be clear about any next steps they should take. Guidance specialists are not financial advisers and will not recommend any financial products or providers.

Feedback on the service so far has been overwhelmingly positive, with service users reporting that they leave the appointment with a much better understanding of their pension options and feeling confident about the next steps they should take.

So if you, or someone you know, is approaching retirement age and has a defined contribution pension, get in touch with Pension Wise.

Recent research conducted by Which? has found that a third of over 55s have been contacted about their pension by companies that could be fraudulent. People approaching retirement should be aware of scams. A Pension Wise appointment will help you understand how to protect yourself from scams and report them if you see them.

  • If you have concerns about being the victim of a scam, call the Citizens Advice Consumer Service on 03454 04 05 06, speak to your local Citizens Advice Bureau or Oddfellows members can contact the Society’s Oddfellows Citizens Advice Line.
  • You can report a scam to Action Fraud via www.actionfraud.police.uk or by calling 0300 123 2040.