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Will we lose our pension if we don’t use a financial advisor?

Will we lose our pension if we don’t use a financial advisor?

What will happen if we don’t seek advice when taking pension benefits?


The new pension legislation is not just something for financial experts to worry about – anyone with a pension needs to be aware that they could lose much of their future financial security to the tax man, if they don’t get the right advice.


And if you are someone who has been through divorce, and relying very much on the pension arrangements for your financial stability, the last thing you need is to unwillingly give a big chunk of it away to HMRC.*


“The new pension regulations are a fantastic opportunity for those who make the right choices, however, everyone should seek advice to make sure they are doing the best thing for THEM as each person is different.  Companies are telling everyone they can take the whole of their pension pot as cash, which is true, but what they are not telling them is that it is taxed at their marginal rate. So, be careful!”


This is the view of Financial Consultant Lottie Kent of Riverside Financial Consultants.  Her concern is that many people will not realise the opportunities available to them and will end up using one way of accessing their pension fund rather than perhaps a hybrid of different options as follows:


Changes in pension legislation means that from April 2015 you will be provided with numerous options in how you can access your Pension Fund:


  1. Take the whole fund as a lump sum
  2. Take smaller lump sums, as and when you need them
  3. Take up to 25% of your fund tax free
  4. Take a guaranteed income for life
  5. A hybrid approach using one or more of the options above


It is widely anticipated that your current provider will be restricted to two options:

  1. Full encashment
  2. Annuity Purchase

However, it is unlikely that they will disclose the tax implications for either.


“We will fully analyse your current position and talk you through the pros and cons of various options and ultimately derive the solution best suited to you.”  Lottie explains.  Lottie herself is a highly qualified financial planner, which means she can advise on complex pension issues whereas a financial advisor who deals mainly with mortgages and insurances won’t have that level of expertise.


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