Tel: 074 912 4366
57 Port Road, Letterkenny, Co. Donegal

Why you need to review your pensions with the bank!

I often encounter clients who, at one time or another, were sold a pension product through a bank. In many cases, people with pensions with banks, have questions and concerns relating to everything from the safety of the Irish banks, to questions about what the bank actually does with their money, to wondering about whether the value of their pension has gone up or down, or asking how much income it will provide them with in retirement.

 

The safety of the Irish banks was hanging in the balance back in 2008, but we have now moved forward from that time. The banks have all undergone significant restructuring, and last year, AIB, Bank of Ireland, and Ulster Bank all passed comprehensive ECB stress tests to prove that they are sufficiently well capitalized to cope with adverse scenarios. At this point, there is no realistic fear of the Irish banks collapsing, and consumers should not fear them.

 

In any case, when you take out a pension through a bank, your money does not remain with the bank itself. The banks employ in-house financial advisors who can provide personalised retirement consultations to talk to clients about their future pension needs, but these advisors act as tied agents for other life companies. The answer to the question ‘What did the bank do with my money?’ will all depend on which bank sold the pension product, which life company it is tied to, and what funds it has been invested in.

 

Some people may have paid into a pension at one time, but since stopped. So they might well be wondering what their pension is worth today, if there is there a lump sum payable at retirement, or what monthly income they might be able to expect. The answer to all these questions will be found on your annual benefit statement. If you have not received this statement, or if you have changed your address without informing your bank, it might be a good idea to inquire about it.

 

Other people want to know whether they are getting the best deal by taking out a pension through a bank, or whether there are better performing funds that they could be invested in. This all depends on where and how your pension fund is invested. You might be happy to leave it where it is. However, you are also entitled to transfer your pension to a different life company that might have funds better suited to your needs and circumstances. Unlike a tied agent in a bank, an independent financial advisor can deal with a wide variety of life companies, and can advise you who will best fit your circumstances.

 

As always, if you have concerns, it is better to address them! As an independent financial advisor and financial broker, we can talk through your circumstances and can review your pension to make sure that it is invested appropriately and you are receiving best advice.

Contact me on 074) 9124366 for an appointment.

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