Let’s start with a quick example:
John is 55, has done his calculations and discovered that if he is to achieve the lifestyle he wants his pension fund needs to double in value before he can retire. The question is how long will that take?
Assuming net growth of 5% per annum, after charges, the answer is 14 years.
So what do you need to do to be able to shave years off your likely retirement date?
The gap between fees charged by the online providers and regulated independent advisers is now huge and growing. Moving to an online platform could increase net returns by up to 1% just through reduced charges. That’s two year’s less work on the example above.
I am not saying that your financial adviser is not providing value for money but you do need to know how much his services are costing and to decide whether that is truly value for money. Negotiate a reduction in fees of just 0.5% pa and you will be able, in this example, to retire one year earlier.
How to retire earlier
Switch to an online platform and you are likely to save at least 1%. That’s two years earlier.
And are you in the best performing funds? I only hold funds in the Hargreaves Lansdown Wealth 150 list. They are all top performing, well researched and well monitored funds. On the other hand a recent Best Invest report disclosed that £34billion of our money is sat in consistently underperforming funds. Is any of it yours? Scottish Widows, Aviva, Legal & General and almost every pension provider has funds in that list. If you can increase performance by just 1% pa simply by using one of the online services to track performance that brings forward retirement by another two years.
So John has reduced charges by 1% and increased performance by 1%. The result? His pension fund will now double in 10 years instead of 14 and he can retire four years earlier. Yes, your figures will be different but the principle remains. Take control of your pension fund or work longer. Which will you choose?
Don’t wait a day longer. Request our “retire sooner” action pack by emailing me.
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