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Pension transfers warning: How Britons can reduce the risk of losing benefits

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But for those who pay attention, there are many opportunities to get ahead of the game and make sure they can hold on to benefits which many others are losing.

Claire Trott, divisional director of retirement and holistic planning at St. James’s Place, told Express.co.uk exclusively: “There are many types of schemes, all with different benefit structures which makes deciding if you should move your funds difficult.”

She said that with the increasing complexity of pensions: “Understanding all the details of your current scheme can be difficult.

“Many old schemes have additional benefits such as more than 25 percent tax free cash, protected pension ages and even guaranteed benefits at retirement.”

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By transferring one’s pension to a scheme with different rules, they may be able to realise new benefits they hadn’t known were available.

The protected pension age change is a perfect example of an area where people who are clued in will be able to retain benefits which others are set to lose out on.

Furthermore, the option to withdraw 25 percent of a pension as a tax-free lump sum is coveted by many and remains one of the most widely touted benefits of a pension.

So if this 25 percent figure can be increased, that will naturally be an important consideration for pension planners.

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Ms Trott added: “However, these benefits need to be weighed up against things like investment options, charges and restrictions of retirement and death benefits.”

With people living longer and longer in retirement, they are having to think harder about creating a pension which will have the same longevity they do.

This only adds to the urgency of making sure people’s retirement plans are in place so they aren’t losing out financially where they could be making gains.

But, as Ms Trott said, these decisions will need to be weighed up against charges and investment returns, which are the most important aspects of a pension scheme when it comes to creating a comfortable and lasting retirement income.

Ms Trott finished by reflecting on how complicated pensions have become and said: “Enlisting the help of a professional can avoid the risk of losing these benefits unnecessarily.”

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