There's little over four months to go before the new world of pension freedom is introduced and along with it a 'guidance guarantee' for all retirees but are you going to make the most of it?
The guidance guarantee was the cherry on the pension reform cake when it was announced in the Budget earlier this year. However, all the focus has been on getting your cash out of your pension and buying Lamborghinis (thanks Steve Webb!).
Because of this, 53% of those aged over 40 don't know if they're eligible for the free half an hour of guidance that the government is offering up, according to figures from insurer Partnership.
A total of 18% said they weren't eligible and 29% said they knew they could use the service.
In fact, anyone aged over 55 who is retiring or just looking to access their pension fund will be able to use the service, whether over the phone via The Pensions Advisory Service or face-to-face through Citizens Advice branches.
Calculate your pension income options
This is a great opportunity to learn more about your pension and retirement options but if you want to make the most out of it you need to do some homework before the call. In order to help those giving the guidance to help you, you will need to be able to provide them with as much information as possible about you pension or more likely pensions.
Some of these pensions may have guarantees linked to them that you will miss out on if you encash them so it is worth checking with your pension provider, and asking if there are any guaranteed annuity rates or guaranteed lump sums to be paid out on your policies.
Before your guidance, have a think about other savings that you may rely on in retirement – do you have ISAs or a second property paying rental income? - and also think about your spouse and what savings, pensions and investments they may have that you can live on jointly, or are they totally reliant on you?
The guidance guarantee is a fantastic opportunity to determine the next step on your financial journey, but you'll need to do some legwork to make sure you get the most out of it.
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