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Client Story: Finding a lost pension was the key to securing Nick’s financial future

By Niche, 19th Nov 2020
3 min read

According to the Association of British Insurers (ABI), more than 1.6 million pension pots worth an estimated £19.4 billion are considered lost. Fortunately, finding a lost pension was the key to helping Nick secure his financial future and achieve his personal goals and objectives.

After working as a delivery driver for a number of years, Nick was semi-retired, indulging in his love for classic cars by working part-time for a local car auction. His wish was to transition into full retirement within the next 10 years, but he was unsure how this decision would affect his financial future, as well as his personal goals and objectives. Nick wanted to pay off his mortgage and some personal debt, while still continuing to live the lifestyle he had grown accustomed to. If possible, he also wished to share some money with his two children.

In order to better understand his situation, Nick contacted Independent Financial Adviser and Pension Specialist, Tom Powell. Tom immediately began the financial planning process by gathering the information needed to effectively analyse Nick’s current financial situation. This involved sending Nick a digital fact find so he could provide all the necessary information required, such as incomes, expenditures and pensions.

What is a digital fact find? A digital fact find is a secure online form which enables you to provide your financial adviser with all the necessary information required, remotely from the comfort of your own home. It also has the added benefit of helping us keep fees fixed and as low as possible for you.

During the fact finding stage, Nick stated he had two pensions. However, following further research and analysis, Tom found an additional pension – essentially a lost pension. This particular pension had been set up when Nick was younger and over the years had grown into a significant sum. In fact, it now accounted for 58% of his total pensions (shown below) and would prove vital.

Using this new-found information, Tom moved to the next stage of the financial planning process by creating several cashflow plans. This enabled Tom to visually depict Nick's current and possible future financial situation, demonstrating the effect certain decisions may have. For example, one of the scenarios involved Nick withdrawing the maximum tax-free cash from each pension and purchasing an annuity. This strategy would result in Nick accumulating a substantial pot by age 85 and allowing him to achieve his goals. However, if Nick consolidated his three pensions with a single provider and took maximum tax-free cash, his pot had the potential to grow to more than double that of the previous scenario.

Therefore, Tom’s recommendation to Nick was to consolidate his three pensions with a single provider, which would take the form of an accessible Retirement Account. This strategy would provide Nick with the assurances he required to retire within 10 years while also achieving his personal goals and objectives. A very happy outcome, as explained by Nick:

"My initial thoughts on financial advice was that it was a waste of a few hundred pounds, but having gone through the financial planning process, I feel very fortunate for where I am now and wouldn't have got here without Tom's help. I hope it's a long working relationship that makes my finances more efficient.” - Nick

This positive outcome may have been different if the third (lost) pension had not been found, highlighting both the importance of fact finding and the role of a financial adviser. If you would like to find out more about this particular story, or if you believe you have lost track of some of your pensions and would like a pension tidy-up, please do not hesitate to contact us – we will be more than happy to help.

Call: 01633 859555

Email: info@nicheifa.co.uk

Office: 5 & 6 Waterside Court, Albany St, Newport, NP20 5NT

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