On the 1st October 2008, the government gave those who have contracted out of the state second pension greater control over planning for their retirement.
What does this mean? Over the years many of us with pensions have opted out of S2P - or SERPS as it used to be known. This is the second part of the state pension into which our National Insurance contributions are made. The technical name for this is Protected Rights and until now where this money could be invested has been governed by strict rules.
Now that the government has changed the rules, individuals have a much greater choice of where to invest their money. Vehicles now permitted include commercial property, Unit Trusts, Investment debentures and warrants – many of which have performed significantly better than the managed pension funds currently invested in.
So what should you do? According to the results of a survey released by independent investment strategists Killik & Co, half of people in the UK with a pension never check its performance with even more having no idea of what they have in their fund. 78% of us have no kind of pension strategy yet this major change in the law could impact on how much money we have in retirement.
Here to explain how the law will affect you and offer advice on where to invest your money, is TV’s independent financial expert, Alvin Hall.