The UK’s decision to quit the EU has had huge implications for anyone with a private pension – both good and bad.
The Brexit vote caused turbulence in the market which was bad news for many pension savers nearing retirement who are seeking a secure income. Since the end of June, annuity rates have plunged to new lows and company pension deficits have ballooned .
But it’s not all bad news. Members of traditional company retirement schemes are experiencing what some are calling a Brexit Bonus.
The UK’s decision to quit the EU has had huge implications for anyone with a private pension – both good and bad.
The Brexit vote caused turbulence in the market which was bad news for many pension savers nearing retirement who are seeking a secure income. Since the end of June, annuity rates have plunged to new lows and company pension deficits have ballooned .
But it’s not all bad news. Members of traditional company retirement schemes are experiencing what some are calling a Brexit Bonus. That’s because offers made to some savers to cash in their final salary or “defined benefit” pension have reached new highs since the Brexit vote.
So while some prospective pensioners look set to lose out, others are contemplating the possibility of a cash windfall. Since the Brexit vote, we have seen some transfer valuations rise by more than ten per cent in just four months.
The reason values have risen is complex and is related to falling yields from gilts.
So is it time to cash in? This is not an easy – or even simple – choice. It’s one of the biggest decisions most of us will ever have to make. The lure of a large transfer value in cash has to be balanced by the security of a final salary pension for life that will rise with inflation (and sometimes more) – and afford a level of benefit (usually 50 per cent) for a widow or widower.
As an Independent Financial Adviser who holds the G60 pension transfer qualification I am authorised by the Financial Conduct Authority to advise on pension transfers. In fact, most providers are unable to accept transfers from advisers who do not possess the G60 qualification.
Whatever kind of pension provision you have, it is most likely that your financial outlook has changed radically (for good or ill) in the last few months by events completely outside your direct control. Any pension valuations that you have received will benefit from a review as a result and the need for sound professional advice about your future has never been clearer in a period of unprecedented financial change.