Josh and his pension - an AJ Bell customer case study
By Mike Narouei, Content Producer at Boring Money
20 Nov, 2020
We all get that pensions are important, but they can seem distant or confusing to the uninitiated. So we caught up with a fairly confident pension saver, Josh, to talk about his experiences. Josh has both a workplace pension through his employer and a SIPP with online pension provider AJ Bell.
How interested are you in your pension?
"Very interested. I read my statements regularly, and ensure the asset allocation within my AJ Bell SIPP reflects the markets and my risk appetite.
"Thankfully Legal & General take care of the other one for me so it's just my SIPP that I focus on."
Do you know what your pension money is invested in?
"I do know what it's invested in. My SIPP is mainly funds based and I've a current desire to invest in renewable energy and sustainable funds. I truly believe ESG (https://www.boringmoney.co.uk/sustainable-esg/) will reflect shareholder returns as we move forward so I wanted to get onto that trend early(ish).
"I do know which companies and fund managers I am invested in and take a particularly close look at them before doing so using tools such as Morningstar and Bloomberg."
What do you think about AJ Bell as a pension provider?
"AJ Bell has been fantastic thus far. Low cost, very easy to use and their reporting is nice and clear. Their service is very simple and I believe anybody even remotely comfortable with online banking would navigate it easily.
"I feel very confident and safe in the hands of AJ Bell."
Do you think pensions are easy to understand?
"For the most part yes, but when it comes to an individual's allowances etc. it can get tricky so I would always seek out advice if unsure about how much you can put into a pension tax efficiently."
If you could change anything about pensions (other than them making more money!) what would it be?
"The ability to, even if incurring income tax on the withdrawal, access your money sooner than 55. I think for a lot of people the fear of "tying up" money for so long when their circumstances may change in the near term puts them off so this "flexible" feature would be excellent."
Finally, why do you think it's so important to save into a pension?
"Where do I begin?! We're all living longer, much longer, as reflected in the state retirement age increasing regularly. With an increased life expectancy comes an even greater need to ensure an individual and family has income to sustain them throughout their retired years.
"To put it very simply there will be a day where we all, each and every one of us, physically cannot get up and go to work due to our frail state and it's at this time we will be entirely dependant on our retirement savings/pensions. I see it as a challenge to ensure that I will be comfortable in my retirement and I would urge any family to start saving for retirement early. It's habitual and when you start it's easier to continue. If you start and stop it becomes exceedingly more difficult as time goes on. Get used to your income at the level with your pension contributions deducted and you'll be able to sleep easy knowing your future self will thank you for being prudent."