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What is your pension really worth?

by Sable International | Dec 11, 2013
  • It’s no secret that retirees are struggling to keep up with the UK’s rising costs of living. In a Channel 4 Dispatches special, Michael Buerk asks what your pension is really worth. We take Buerk’s findings one step further by offering our own analysis by Gary Clayton, Independent Financial Planner at Sable International.
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    Michael Buerk’s Channel 4 special uses secret filming, aided by the advice of industry insiders, to investigate the practises of less-scrupulous retirement providers; companies that offer their clients poor returns and exorbitant fees as part of their pension plan. When coupled with stagnating salaries and an increase in life expectancy, it becomes clear that most retirees are fundamentally ill-prepared, and ill-advised, for retirement. 

    The program warns us that we can be in for a big shock when we retire if our income expectations do not match the reality of our retirement income. According to Clayton, the program highlights the fact that people do not know how much they need to save to have a basic standard of living during retirement.

    “Cost of living and increasing life expectancy are two big risks that people should be aware of. To provide minimum wage in retirement, you ideally need a pension pot of roughly £250, 000,” says Clayton.

    UK pensions expert and campaigner Ros Altman also features on the show. Sable clients may remember Altman from the popular DC Time Bomb seminars, which were held all over the UK. “The miss-selling of pensions,” says Altman, could be at least as big as the miss-selling of payment protection.”

    Clayton, too, believes that the miss-selling of these pensions is a risky exercise if the advantages and disadvantages are not fully explained to the client. Below, he lists the changes to your life that can negatively affect your retirement pension – changes that retirement providers often keep secret.

     If you pass away after buying a pension, your pensions savings can be lost, leaving your beneficiaries without benefit

    Clayton identifies a further four factors that influence the size of your pension pot:

    • The size of your contribution
    • The period of time that you contribute (taking into account compound tax-free returns on all your contributions)
    • Your returns on the underlying investments
    • The costs of implementing all of the above.

    Clayton agrees that Buerk's findings underline the importance of skilled financial advisers in guiding retirement decisions.

    “Almost every bit of research out there confirms that people who take financial advice are far more in control of their financial futures than those who don’t. That’s because they are guided to make the right savings and investment decisions, which pay dividends in the future.”

    However, he also emphasises that many clients are still at the accumulation phase of their wealth. In this regard, purchasing an annuity is an option for retirement, and not something that you are forced into purchasing. 


    Our wealth team is committed to bringing a new era of financial services to foreign nationals based in the UK. You can reach Sable Wealth on 020 7759 7514 (UK) or wealth@sableinternational.com.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

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