| Personal pensions, or any pension for that matter, | | | | per year in lost performance. Those investors buying |
| are about as exciting as getting a DVD extended | | | | a fund like 'AIG Fidelity special situations' as opposed |
| version of a Halifax advert for Christmas. | | | | to 'Fidelity special situations' should view what will be |
| That said, pensions are one of the biggest | | | | an alarming graph showing the difference in |
| investments we will ever make, yet we have the | | | | performance.(1) |
| most amazing apathy towards them. | | | | Perhaps when the marketing department is telling |
| They are complicated and have just become more | | | | you about your guaranteed annuity inside your |
| and more complicated and for most of us, the words | | | | pension, they might tell you that it's only a |
| we associate with pensions are charges, commission | | | | guaranteed annuity at the high rate if you take the |
| and losing money. Perhaps it's not so amazing why | | | | pension as single and with no increase after |
| we have so much apathy then. | | | | retirement. In other words, if you died soon after |
| The financial downturn has had a big impact on | | | | taking your pension, your spouse would receive |
| pension planning, shoving it right to the back of most | | | | nothing and also if you lived longer the pension would |
| people's minds as they focus on day to day living. | | | | not be increasing with inflation. Ten years after taking |
| There are a range of small tweaks that pension | | | | your pension it could be as much as a third less if |
| customers could make to their pension that will | | | | inflation averaged 3%. Perhaps they might tell you |
| potentially save them millions, rather than the pension | | | | this or perhaps not. |
| companies or tax man benefiting. | | | | Perhaps when your pension is about to mature, your |
| Here are some of the tips: First of all approach a | | | | pension company will advise you that you could use |
| good Independent Financial adviser who offers you a | | | | the fund you have built up and go to another pension |
| fee option to assess your pension. Because the | | | | company to buy yourself the best income. They |
| adviser is fee-based there will be no motivation for | | | | might even let you know if your health had |
| them to simply turn your pension over to make a | | | | deteriorated that you could actually get an enhanced |
| quick commission buck and the unscrupulous will | | | | income with someone else. Perhaps not. |
| always find a reason. | | | | Maybe in a moment of weakness they might show |
| Charges: You might think your pension provider will | | | | you that most of their funds do not outperform an |
| call you to let you know their new products are a | | | | index (like the FTSE100) and are basically an |
| tenth of the price of their old one (that's the one | | | | expensive copy of that index |
| you have), but they won't. | | | | In my column a few weeks back I showed that |
| You might hope they'll tell you that if you were to | | | | many funds simply have much of the same stock in |
| die before taking the pension that you may only get | | | | their portfolios as each other. |
| your premiums returned rather than the fund value | | | | Go to any fund comparison site and have a look at |
| and potentially lose thousands, but they won't. That | | | | the top ten holdings in the big pension funds. You'll |
| happened to a reader of this column whose husband | | | | see they are pretty much the same. It's an |
| died and the final death value of the pension was half | | | | expensive way to have a virtual index tracker, but |
| what it actually was worth the day before he died. | | | | they would tell you that wouldn't they? |
| Perhaps you might think they'll tell you that instead of | | | | Hardly. Every key point above should be covered in a |
| being invested in the actual fund you believed you | | | | pension review by a fee based adviser and every |
| had chosen, you were invested into a copied version | | | | day goes by is an expensive one. |
| of it, a version that might cost you as much as 12% | | | | |