IMPORTANT ANNOUNCEMENT: MyWalletHero is becoming The Motley Fool UK - click here to read more about our name change.

Do I need a financial adviser for my pension?

Do I need a financial adviser for my pension?
Image source: Getty Images

Do you have a pension? You might be wondering whether you always need to contact a financial adviser when opening, transferring or making changes to a plan. This article answers some of the most common questions about when a financial adviser is needed.

Is a financial adviser always necessary?

You don’t always need a financial adviser for your pension. You can do the following without one:

  • Open a self-invested personal pension (SIPP)
  • Open a stakeholder pension plan
  • Transfer multiple pensions to a single pension (consolidation)
  • Increase pension payments into a SIPP, stakeholder pension plan, or an occupational defined contribution scheme

When is it worth seeking financial advice?

There are a number of different situations when it’s a good idea to seek professional advice. Such situations could include the following:

  • Drawing your retirement income
  • Accessing your retirement income tax-efficiently
  • Finding the best deal on an annuity
  • Estate and inheritance planning
  • Changing your investments to reduce risk

When do I need a financial adviser for my pension?

It is advisable to seek financial advice for your pension before you decide to do any of the following:

  • Respond to an unsolicited approach from a ‘company’ about cashing in your pension
  • Undertake pension release or pension unlocking before you turn 55
  • Sign up for any type of pension investment without understanding the implications

Are there any situations when I have to get one?

Yes, there are. By law, you must get financial advice if you are in the following situations:

  • You have a final salary or defined benefit pension worth more than £30,000 and you want to transfer it to a defined contribution pension scheme.
  • You have a defined contribution pension scheme worth more than £30,000 with a guarantee of what you will be paid when you retire, and you want to give this up to do something else with it.

If you are in this situation, you will need to make sure your financial adviser is registered with the Financial Conduct Authority (FCA).

Where can I get a financial adviser?

If you need to seek financial advice, check out our article on the seven steps to finding a financial adviser.

When looking for a financial adviser for your pension, it’s a good idea to select someone that is registered with the Society of Later Life Advisers (SOLLA). Registration with this organisation ensures that specific standards of practice are met.

How much will it cost?

Fees and charges will vary depending on the service you need. When looking for a financial adviser, it’s a good idea to contact them and ask about their fees and charges before booking an appointment.

For further information, check the Money Advice Service’s guide to financial adviser fees.

Take home

Take your time when making decisions about your pension. You should never be rushed into a decision. Make sure you understand the implications first.

If you are still wondering whether you need a financial adviser for your pension, don’t worry. If you are aged 50 or over and you have a personal or workplace pension, Pension Wise offers free impartial government guidance about your options.

For further information, you can also read our article on how pensions work.

Rated 5 stars out of 5 by The Motley Fool UK

Trade UK shares for just £2.95 and US shares for just $3.95 — with no platform fee!

The FinecoBank* Multi-Currency Trading Account offers UK investors highly competitive share-dealing rates across 26 global markets. Open your account using promo code TRD500-ML and during your first 3 months you can trade without incurring commission charges – up to a total commission amount of £500. (Terms and conditions apply.)

*Affiliate Partner. Important information and risk disclaimer: The value of shares and any income produced can fall as well as rise, and you may get back less than you invest. Exchange rate fluctuations can reduce the sterling value of any overseas holdings.

Was this article helpful?

Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.