Getting Your Pension Right Can Change Your Life – A Client’s Story

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At Holborn Assets, we always stress the importance of financial planning and getting ready for the time when you are no longer able to work.  Unfortunately, for some people retirement can come much earlier than expected due to an accident or illness, leaving them and their families in a complicated financial position. The following is the story of John, a client of ours.  We publish it with his consent; his name has been changed for confidentiality reasons.

John is a British national, but lives with his wife in a remote place in a fairly rural part of Central Ireland.  Until his 50’s John’s financial position was similar to thousands of others. He had a job, a house, a mortgage, some debt and had been saving for retirement via a pension plan.

Things took a turn for the worse when a work accident left John with severe shoulder damage. Now at 57 John no longer works and receives disability benefit. His finances of course took a big hit and the unexpected reality of retirement coming many years earlier put him and his wife in a very uncomfortable situation.  Living abroad makes everything even more complicated.

John spent four years trying to claim compensation for the work accident. Although he finally succeeded and the damages ended up paying off his debts and mortgage, the whole process also involved diagnosed stress for both him and his wife.  Other than his house John had no other significant assets, nor any family support anywhere. A very tough time.

One of our advisors, David Wells, started to work with John last November, trying to find a way to improve his financial situation and, particularly, track down his pension and see if John could possibly access some of the funds immediately.  The problem with John’s pension is very common with British nationals, both those living in the UK and expats. Over the years it is hard to keep track of the pension plans, all the rules, changes and options.
In John’s case, the situation looked very bleak at the beginning.

After several months of very frequent communication involving John, the advisor and the trustees, nothing could be found and the case got close to being halted on two occasions. Finally in April 2015 the persistence paid off and the trustees called John, asking some more ID questions – a good sign.  In May, John’s pension assets were valued at £120k and, importantly, at his age of 57 John could access 30% of that immediately – a truly life changing event.

John’s story ended well, but thousands of other people are less fortunate in similar situations. There are a few things to point out and a few lessons to learn.

Firstly, keeping track of your pension plans, savings and related legislation is not easy. It is best to review all your financial arrangements regularly (for example once per year), even when you don’t want to make any changes at the moment. A good financial advisor can help with that.

Secondly, when trying to get access to a pension plan or other assets which you have lost track of over the years, persistence is the key. Be prepared for some trustees to be less than helpful and don’t let initial negative answers discourage you from getting what is rightfully yours. Unless you have substantial experience in finance, it may be hard to challenge the trustees and you may feel intimidated and overwhelmed with the financial and legal jargon. Therefore, getting professional help is strongly recommended and well worth it.

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