A pension is effectively a safeguard for the future. A way for members to make sure they have money to spend when they stop work.

With that in mind, it’s important members understand what their pension can do for them and how to make the most of it. That’s where a financial adviser might be able to help.

Do members HAVE to get financial advice?

There are a limited number of circumstances where getting financial advice is a legal requirement. For example, if the value of a member’s DB benefits is more than £30,000 and they are looking to transfer to a Defined Contribution/Personal Pension Arrangement, then by law they have to get financial advice before the transfer can be made.

And the Government are currently considering more circumstances where financial or pension advice may be legally required.

In most cases though, whether or not to get financial advice is entirely the member’s choice.

Before that, members may find some of the answers they’re looking for in their Member Guide, or in the wide range of informative content available across the member website.

This includes a number of tools designed help them understand their pension and consider their options, such as:

• The Retirement Budgeting Calculator, to help RPS and BTPFSF members work out how much income they might need, to enjoy the lifestyle they hope for when they stop work
• A range of videos in the video library on both the RPS and BTPFSF member websites, covering topics such as planning and saving, tax and your retirement options

When members should think about getting financial advice for their pension

Reasons for consulting a financial adviser can include getting help with:

• General financial planning
• Tax
• Deciding how to take your pension when approaching retirement
• Avoiding pension scams by getting an expert opinion and/or a steer toward reputable services/products

Getting advice on their pension could also be particularly useful if things in a member’s life have changed, or if they’re considering a change of another kind.

For example:

• starting a pension
• considering whether to transfer their pension
• if they’ve recently received money, such as inheritance, or a lump sum pension pay-out and are unsure what to do with it
• if their personal situation has changed, for example through divorce

The benefits of members getting financial advice for their pension

For members, getting financial advice usually means having an expert on hand. For example, someone who can:

• guide them through any difficult decisions relating to their pension and recommend a way forward to suit their needs
• point them towards products and options that will best match their personal circumstances and goals. And in some cases access products they wouldn’t necessarily have found on their own.
• put together a plan and make sure it stays on track over the longer term, even making adjustments with a member’s permission if necessary
• help make sure they’re within the relevant tax allowances and advise on alternatives if they’re reaching them
• look at ways to boost the member’s pension

Finding the right financial adviser

It’s important for members to first understand the different between guidance and advice. They may sound similar, but from a financial perspective there is an important difference.

Individuals and organisations offering financial guidance can simply provide information about your options. Whereas financial advisers can actually recommend which product they think would suit the member best.

Unlike guidance services, financial advisers are regulated by the Financial Conduct Authority (FCA). This means they have to agree to a certain level of standards and members can get additional support through the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong.

Liverpool Victoria (LV) has been chosen as the official partner to give RPS and BTPFSF members access to financial advice.

LV covers all areas of pension advice, including:

• retirement
• financial planning
• transfers

And has a dedicated team, with specific knowledge on the Scheme.

LV can be contacted on 0800 023 4187.

Members are still free to choose their own Independent Financial Advisor (IFA). And can find an IFA in their area at unbiased.co.uk

Considering the cost of financial advice

Getting financial advice can be expensive. 

Any member who contacts LV will be evaluated for free first, to make sure that only those who truly need advice will progress to the chargeable stage. And even then, LV will offer its services at a discounted rate for RPS and BTPFSF members.

If members chose their own independent adviser, their charges and areas of expertise may differ. So it’s best for members to shop around to find the best fit.

Looking out for scams offering financial advice

Scammers sometimes pose as financial advisers, or claim to be offering financial guidance and advice, as a way of getting their hands on peoples’ pensions.

Members should be particularly cautious if anyone contacts them out of the blue, or offers a free pension review or no-obligation consultation. Especially if they actively encourage the member to transfer their pension or ‘unlock your benefits early.’

Before entering a conversation with anyone, members should check their details against the Financial Conduct Authority (FCA) register to make sure the company are fully regulated and have the FCA’s permission to provide the services they’re claiming to offer.

Members can also check the FCA’s warning list to see the names of companies who are known to be operating without proper authorisation.