Are Pensions like Cars?

By Rachel Efetha, Chartered Financial Planner.

Pensions are much like cars when you think about it.  You get a brand-new shiny car, the interior has that new car smell, there’s not a scratch on the paintwork and you make sure you park as far away as you can at the supermarket, so no one dints it with their door.  The engine is purring away nicely, the tyres are fully inflated, the engine is nicely lubricated with high-quality oil, and nothing is blocking the air filters.

Falling out of love.

But it doesn’t stay like that. The exterior gets dirty with salt from the winter roads, and it needs cleaning, the tyres need pumping, the oil needs checking and so you need to do your bit to maintain it.

Then you need to take it to the garage for servicing, oil change, filter changes and new tyres.  As the car gets older, you get a dashboard warning light, there are strange noises, dripping liquid and mystery puddles, loss of power and frequent stalling and smoke coming from the bonnet or exhaust.  All these things need investigating and repairing.

If you simply just drive your car and never get it serviced, then breakdowns increase, it has a shortened lifespan, the resale value drops, you have increased emissions, poor fuel economy and one day you could be driving down the motorway and you drop a piston (RIP Winston the Metro), the engine catches fire (RIP Ethel the Chevette), your steering column goes (RIP Eddie the Escort) or your head gasket blows (RIP Tommy the Toyota) leaving you with no car and potentially putting your life and the life of others in danger.

Luckily, I learned from my earlier car-owning experiences that Sally the Skoda, Chrissie the Chrysler, Freddie the Ford, and Maxi Jazz the C-Max have not met with such fates.

Much like your car, you’ve got a brand-new shiny pension and you should expect that to run smoothly for a couple of years too it’s got the most competitive charges, the best fund manager and impressive performance otherwise we wouldn’t have recommended it to you.

Do your Pensions need a service?

However, you can’t just sit there and expect it to continue working for you without a regular service.  Fund Managers lose their mojo or move on to a new job, the investment parameters change, and the fund is more or less risky than it was, charges might remain the same, but competitors bring out cheaper contracts, and as you get nearer to retirement your risk tolerance changes.

How Anstee & Co can help you service your Pensions.

So, if you haven’t serviced your pensions within the last three to five years, please do get in touch before you are doing 70 mph on the M1 towards retirement and the market crashes.

If you are considering your financial options but are unsure about how they may impact your financial future, we can help. We at Anstee & Co. are Independent Financial Advisers which means that the financial advice we offer is unbiased.

The initial meeting is at our cost, so why not contact us today? A meeting can be arranged at a time and location that is convenient for you.

Our expertise covers all aspects of financial planning including pensions, investments and mortgages.

If you have any thoughts on this article, “ Are Pensions like Cars?”, then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).