How can I manage the financial impact of early retirement?

If you can’t access your pensions yet, or have other savings available which mean you don’t need to dip into your retirement savings now, it’s worth checking that your money is working as hard as it possibly can for you.

If you have a defined contribution pension, your pension contributions will usually be paid into what’s known as a ‘default fund’ unless you’ve let your provider know you’d rather your money was invested elsewhere. Default funds are generally ‘multi-asset’ funds, which mean they invest in lots of different assets, such as shares, property, bonds and cash. It may be that there are alternative funds which are more suitable for your circumstances.

According to analysis by Profile Pensions, if your pension savings were to grow by an extra 1% a year, this could give you an additional £22,649 over 20 years, possibly enough to retire a couple of years early. This assumes a pension value of £50,000 growing at 5% vs 6% respectively with charges of 1% applied. Learn more about pension investments in our article Where is my pension invested?

If you want personal recommendations about where to invest your retirement savings, you’ll need to seek professional financial advice. You can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guides on How to find the right financial advisor for you or How to get advice on your pension.

If you think you might be interested in speaking with a pensions expert, Rest Less Financial Services is now offering our members a free Pension Health Check with a Rest Less Pensions Expert.

Author: wpadmin

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