Pension reforms came in to effect on the 6th April 2015, allowing people approaching retirement to have more choices about what to do with their pension pots. For the first time, people will have the freedom to decide whether they buy an annuity, take a lump sum, or a mixture of both with their Defined Contribution Pensions.
Citizens Advice Plymouth is one of 50 Pension Wise delivery centres providing face to face guidance across 500 locations in England and Wales which will help people to make sense of their pension choices.
Pension Wise guidance is also available over the phone from The Pensions Advisory Service (TPAS) and online by the Government. The 45-60-minute appointments will be tailored to the individual, taking into account the value of their pension and their plans for retirement.
The service is highlighting how to get the most out of a Pension Wise appointment. Preparation is key, with people knowing enough about their pension so that they can spend the appointment discussing their circumstances and options.
Citizens Advice Plymouth has put together a guide on how to prepare for a face to face Pension Wise appointment which is provided to clients when they make a booking.
Emma Handley, CEO Citizens Advice Plymouth said:
“Pension Wise will help people to make sense of their pensions choices. To make the most of a Pension Wise appointment, preparation is key – the more a trained guidance specialist knows about someone, the more they can tailor guidance to their needs. We know that getting together the right information can take a while.”
“People are also worried that having access to their pension pot means they might be targeted by scammers. Citizens Advice already provides advice and support on scams. You can contact us to find out what to look out for or to report a possible scam.”
How to prepare for your appointment
Step one: What is your pension pot worth?
The first thing you will need to know is the value of your pension. Here’s how you can find out:
- Pension statement – you should get a statement through the post every year, detailing the value of your pension.
- Pension provider website – some providers allow you to log in and view your statement online.
- ‘Wake up pack’ – your provider will send this out 4-6 months before your selected retirement age.
- Get in touch – if you haven’t got any documentation, give your provider a call.
- Trail gone cold? If you don’t have any information at all about your pension, visit https://www.gov.uk/find-lost-pension
Step two: Find out if there are any terms and conditions attached to your pension.
Some pensions will have special conditions attached, such as penalties for drawing your pension earlier than planned.
- Check your original paperwork for any terms and conditions.
- Or contact your pension provider for information.
Step three: find out how much state pension you will receive.
State pensions vary from person to person, and depend on things like how many years you have been in employment. From April 2015, the most you will get will be £115.95 per week. Calculate your state pension by visiting: https://www.gov.uk/calculate-state-pension
Step four: think about your circumstances
Some people enter retirement without any pressures, while others may be paying off debts or supporting their children financially. You may also have other income to consider, such as benefits. Think about any immediate financial needs, and any future needs you anticipate, such as care costs.
Step five: How do you want to spend your retirement?
Many people look forward to a change in lifestyle at retirement. It’s important that you consider the costs of any essentials, such as housing, energy and food, along with leisure time and one-off costs like home improvements. This should help you come up with a realistic sense of your expenditure, and what income you need.
Step six: Bring just the relevant information with you.
Pension Wise appointments last around 45-60 minutes, so you don’t want to spend that time searching through 30 years of statements. Bring just what’s relevant, for example: your most recent statement, giving you more time to discuss your options and next steps.
How to book an appointment with Pension Wise:
People approaching retirement with a defined contribution pension pot will be able to get help from Pension Wise:
- Online by visiting the Government’s Pension Wise website for an online booking
- By calling Pension Wise on 0800 138 3944
Watch out for 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, speak to your local Citizens Advice Bureau or call the Citizens Advice Consumer Service on 03454 040 506.
- You can report a scam to Action Fraud via their website by calling 0300 123 2040