By Simon Mayoh, Financial Planning Consultant, Armstrong Watson LLP

IT’S fair to say that value is very much subjective as individuals will find value in different things.

The Collins Dictionary defines Value as “the value of something such as a quality, attitude, or method is its importance or usefulness. If you place a particular value on something, that is the importance or usefulness you think it has”.

Most people look to access their pension when they retire. At this point, they will assess the value in monetary terms, and how it will fund their lifestyle once their income from employment or self-employment ceases. It is, however, a harsh reality of life that some will unfortunately not get the chance to draw on their pension provision, dying sooner than expected.

What then, is the value of their pension? It would be reasonable to assume that the value in a statement would be the amount paid to your beneficiaries should you die. This isn’t, however, always the case. Many older policies, effected before the 1990s, actually pay out a lower amount upon the death of a policyholder.

Since April 2015, changes to pension legislation have resulted in many people using pensions as a way to pass on wealth to subsequent generations due to the favourable Inheritance Tax treatment.

Thankfully, where the actual value is lower than the statement value then action can be taken to preserve the value of the pension upon the policyholder’s passing. Potentially switching to a more modern and flexible contract, can mean the value of the holding to be the same both during your life and after your time.

Advice should always be sought when taking such advice, as valuable safeguarded benefits such as guaranteed annuity rates or protected tax-free cash may be at risk should you transfer out of an old pension scheme.

So, next time you receive your pension statement don’t take this at face value. You should seek advice to understand what the actual value is to you and your loved ones.

At Armstrong Watson, our quest is to help our clients achieve prosperity, a secure future and peace of mind.

We can provide a full review of your pension arrangements and discuss the opportunities available to you with our compliments in the first instance. For more information please phone Simon Mayoh on 07860 846370 or email