Virgin Moneys independent financial expert, Harvey Jones, has chosen to focus his latest column on the problem of sorting the right pension. With many My Virgin Money Magazine readers keen to know how best to tackle the issue of selecting the right pension for them, Jones has some handy insights.
One of the points that Jones is quick to stress is the importance of shopping around, with so many varying deals on offer. He also gives us a reminder that 25 per cent of your pension pot is tax-free cash a positive note to start the search on.
Sorting out your pension at retirement is one of the most important things you will ever do, because it will affect your wealth for the rest of your life. Get it wrong, and you could squander thousands, so you need to explore all your options, explained Jones.
Most company and personal pensions invest our contributions in shares, property, bonds and other investments, and hand us a pot of money at retirement. We then use this to buy an annuity, an income for life.
Volatile stock markets and sliding annuity rates have savaged the returns from this type of pension. Rising life expectancy hasnt helped, because our pension money has to stretch further. If you retire at 65 with a 100,000 pension pot, you would currently get a maximum income of less than 6,000 a year.
To find out Jones top tips to getting the right deal, head over to Virgin Money.