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Do I need a financial adviser for my pension?

Do you have a pension? Do you know when to seek advice? If you’re wondering whether you need a financial adviser for your pension, read on.

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Fiona Vanier
Fiona is a freelance writer specialising in personal finance. She has a particular interest in helping people struggling with debt, and finding new and interesting ways to travel on a budget.
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Do you have a pension? You might be wondering whether you always need to contact a financial adviser when opening, transferring or making changes to a plan. This article answers some of the most common questions about when a financial adviser is needed.

Is a financial adviser always necessary?

You don’t always need a financial adviser for your pension. You can do the following without one:

  • Open a self-invested personal pension (SIPP)
  • Open a stakeholder pension plan
  • Transfer multiple pensions to a single pension (consolidation)
  • Increase pension payments into a SIPP, stakeholder pension plan, or an occupational defined contribution scheme

When is it worth seeking financial advice?

There are a number of different situations when it’s a good idea to seek professional advice. Such situations could include the following:

  • Drawing your retirement income
  • Accessing your retirement income tax-efficiently
  • Finding the best deal on an annuity
  • Estate and inheritance planning
  • Changing your investments to reduce risk

When do I need a financial adviser for my pension?

It is advisable to seek financial advice for your pension before you decide to do any of the following:

  • Respond to an unsolicited approach from a ‘company’ about cashing in your pension
  • Undertake pension release or pension unlocking before you turn 55
  • Sign up for any type of pension investment without understanding the implications

Are there any situations when I have to get one?

Yes, there are. By law, you must get financial advice if you are in the following situations:

  • You have a final salary or defined benefit pension worth more than £30,000 and you want to transfer it to a defined contribution pension scheme.
  • You have a defined contribution pension scheme worth more than £30,000 with a guarantee of what you will be paid when you retire, and you want to give this up to do something else with it.

If you are in this situation, you will need to make sure your financial adviser is registered with the Financial Conduct Authority (FCA).

Where can I get a financial adviser?

When looking for a financial adviser for your pension, it’s a good idea to select someone that is registered with the Society of Later Life Advisers (SOLLA). Registration with this organisation ensures that specific standards of practice are met.

How much will it cost?

Fees and charges will vary depending on the service you need. When looking for a financial adviser, it’s a good idea to contact them and ask about their fees and charges before booking an appointment.

For further information, check the Money Advice Service’s guide to financial adviser fees.

Take home

Take your time when making decisions about your pension. You should never be rushed into a decision. Make sure you understand the implications first.

If you are still wondering whether you need a financial adviser for your pension, don’t worry. If you are aged 50 or over and you have a personal or workplace pension, Pension Wise offers free impartial government guidance about your options.