Platforms & Pensions
If you have chosen to run your own pension plan , you will need to commit a lot of time as well as money to obtain a decent income when you stop working
You can save a hatful of money researching your investments and managing them over the decades . Why pay your adviser or broker 1 % of the value of your portfolio each year when you can invest it and watch that grow , too ? Let ’ s face it , if you have chosen to run your own pension plan , you will need to commit a lot of time as well as money to obtain a decent income when you stop working . But there are two relatively new problems that investors in defined contribution schemes now have to contend with :
Longevity risk – We ’ re living for longer , meaning our pensions need to last for longer . Think of this as taking travellers ’ cheques on a two-week holiday which then gets extended to three weeks . It ’ s nice to have a longer holiday , but less so if you sit on the beach hungry and with nowhere to stay .
Inflation risk – For most of the past 10 years , inflation has been constrained within a tight band of no more than 3 % per annum and most of us had forgotten about the damage rising prices could inflict on
Issue 92 - February 2023 / 67 /