News

21 March 2016

Don't assume your salary-related pension will pay out in full

In today’s Press & Journal, Carbon financial planner, Richard Wadsworth issues a cautionary note to everyone with a salary-related pension scheme.

Richard points out that most pension schemes don’t have adequate funding to pay out to all members at the same time. To deal with this, employers put in place recovery plans under which they contribute additional cash to the pension scheme over a period of years. This highlights the need to consider the likelihood that any employer standing behind a salary-related scheme will be around for perhaps another 30 years in order to make good any shortfall in the pension fund.

Richard cites the very topical example of Sir Philip Green and the current troubles with the pension scheme at BHS. The Pension Regulator is looking to him to make good some of the shortfall in its pension scheme. Negotiations are ongoing, however what happens to the BHS pension scheme if ultimately he doesn’t pay up and BHS can’t make up the shortfall?

The BHS scheme could then fall into the Pension Protection Fund (PPF), and Richard goes on to explain how this works. Richard’s over-riding advice is to look at your pension statement which will provide a snapshot of its financial health, but also to look at the general health of the company that stands behind the scheme.

As Richard points out, salary-related pension benefits are very valuable, but don’t just assume they are guaranteed and will be paid in full. Now is the time to find out the position so that you can take the necessary action to avoid nasty surprises in the future.

It is an interesting article with lots of sound advice. You can read the whole piece here, or by clicking on the image below.

If you would like to discuss your financial planning options, please contact us with any questions you might have. You can do this by calling our head office on 0131 220 0000, or by emailing us at enquiries@carbonfinancial.co.uk. or you can also follow us on Facebook, Twitter or LinkedIn.

You can view Richard Wadsworth’s profile here.

P&J 21 March 16

Sign-up for our Carbon Catch-Up Newsletter.

Signup

Sign-up for our Carbon Catch-Up Newsletter.

* indicates required

Carbon Financial will use the information you provide on this form to keep in touch with you and to provide updates and marketing. Please indicate below that you are happy to receive our updates in the future:

You can change your mind at any time by clicking the unsubscribe link in the footer of any email you receive from us, or by contacting us at alison.whyte@carbonfinancial.co.uk. We will treat your information with respect. For more information about our privacy practices please visit our website. By clicking below, you agree that we may process your information in accordance with these terms.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.

Contact us today...

We have offices in Edinburgh, Glasgow, Aberdeen, Perth and London. You can contact us at any of our offices, or by email.

Carbon Financial Partners Limited is authorised and regulated by the Financial Conduct Authority. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

The Financial Conduct Authority does not regulate some forms of tax advice.
Registered in Scotland #SC386400.
Registered Office: 61 Manor Place, Edinburgh EH3 7EG, Scotland.
© Carbon Financial Partners 2021
www.financial-ombudsman.org.uk

Client Account | Personal Finance Portal | Privacy Notice | Cookies

Site designed and developed by Art Department