Have you checked your pension pot lately?
If you are one of the many people saving for retirement safe in the knowledge that your pension will maintain your living standards in retirement, it may be time to think again.
Many pension savers are finding out the hard way what we are about to tell you…
A growing number of people receiving their annual pension statement will find that on closer examination half of its value has been lost. There is a reason for this that neither your pension provider or the government is telling you, yet it is no secret…
The number of people on the receiving end of this hidden pension danger now represents 1 in 5 of the UK’s pension age population. This hidden danger is what the press are calling ‘pension poverty’.
Now we could be forgiven for thinking that living in the safety of the world’s 7th largest economy would afford us a decent standard of living – think again…
21.4% of older British people were classed as being at risk of poverty in 2010. This was “significantly higher” than the EU average of 15.9 per cent according to the Independent Newspaper this month.
Now there are countries that offer much better conditions for older people, take for example the former communist states of the Czech Republic (9 per cent at risk) or perhaps Slovakia (12 per cent at risk).
If escaping to those countries doesn’t appeal to you, consider this – since June 2010 the FTSE 100 on which your pension is based grew by just 1.88%. Subtract the 1% your pension provider charges you and there is not a lot left.
It gets worse when we look at inflation in this period. June 2010 saw inflation of 5.1%, June 2011 saw 5.2%.
Inflation has fallen recently, but it is still an uncomfortable 3.6%. What will this wealth erosion mean for your pension?
Fortunately there is a way to avoid the hidden dangers of wealth erosion and rollercoaster stock markets so that you can avoid joining the 1 in 5 pensioners living in poverty.
That solution is a self invested personal pension (SIPP).
A sipp provides the following benefits:
- It can provide a safe haven for your money
- You still receive all the tax benefits associated with the traditional pension schemes
- It gives you control of your retirement planning
- You will not be reliant or dependent on fund managers and the movements of stock markets unless you choose to be
- You can choose to invest in a whole range of Alternative Investments offering guaranteed returns
- You can take a tax free lump sum at 55 rather than waiting until you are 65
It gets better.
If that sipp is invested in property you can…
Have a Pension fund of £150,000 and enjoy returns of £5,700 p.a. when you retire – by moving this to a SIPP and investing it into a property, you could achieve another £50,000 a year.
Please choose from our range of property sipp investment products that will help you avoid the hidden dangers of pensions and provide a retirement worth looking forward to.