4.The charges you pay: Minimising the charges also minimises the reduction in annual growth.
5.Where money is invested: The greater the pension fund can grow over a sustained period the greater fund value could be at retirement.
All of these elements are detailed in current KFIs. However, it is now the job of the adviser to present scenarios which drive these key points home. Online pensions calculators now enable people to play with these five key ‘outcome determiners’ and look at overall impact on savings.
Advisers will need to work with providers’, platforms’, or even their own online portal(s), which enable clients to put these calculators to work to determine what they need to save and what they can afford to save. Planning is crucial or we risk continuing the trend to save less and less for retirement even as longevity increases.
Online portals will also increasingly offer views into a full mix of clients’ savings pots. So it will be possible to see them all in one place online and calculate what these pots could generate in income terms in partial and (later) total decumulation.
Natanje Holt is managing director of Dunstan Thomas
Key Points
New personal pensions Key Features Illustrations must now show inflation-adjusted growth figures and use new projection rates of 2 per cent, 5 per cent, and 8 per cent.
There is a big disparity between growth projections pre and post PS13/02 inflation adjustment, which could deter consumers from using pensions.
Advisers need to help their clients to manage an increasingly complex mix of assets and income streams, which those of retirement age will be drawing on.
