How to help prevent future pension problems

She has drawn up a list of 10 commandments that individuals and their advisers can use to help protect them against not only poor scheme administration but also errors on behalf of HMRC. 

Her Ten Commandments for improving retirement income are: 

• Understand what income needs will be in the future. This should be the goal set for retirement, rather than simply accepting the pension offered from each source. 
• Consider all options in terms of flexi access, guaranteed lifetime income annuities, and ensure that all lifestyle and health issues are fully explored, as this could gain more guaranteed income. 
• Don’t underestimate life expectancy - always plan for 100+. Don’t forget to provide for inflation and for dependents, who may not qualify for continuing pensions after your death.
• Get a retirement specialist IFA to check that the offer of pension from the scheme is correct based on the scheme rules, and individual salary and service history.
• Seek advice on whether the scheme rules and pattern of income payment meet your needs. For the majority of scheme members, they are likely to be the best option, but if personal circumstances make you an exception, there could be benefit in getting advice on alternative strategies. 
• For contract-based schemes, shop around the whole market, do not accept the first pension offered.
• Get a state pension forecast. If there is a shortfall, ensure that all credits have been claimed and, if necessary, make top-up payments to secure a higher pension.
• Make full use of tax relief and carry forward of relief from earlier years to top up pensions before drawing benefits.
• Be aware that drawing £1 more than the tax-free cash via flexi-access drawdown will end carry forward and limit future tax relieved contributions to £4,000 (the Money Purchase Annual Allowance).
• Expect the first pension payments to be incorrectly taxed, as HMRC uses an emergency code, so be ready to reclaim the overpaid tax.

Ms Ingram adds: "Starting to plan at least five years before income is likely to be needed will enable gaps to be filled and alternative strategies to be considered fully. 

"Focusing on future income needs, and aiming for that goal, may achieve a better retirement than simply accepting the pensions offered from various sources."

simoney.kyriakou@ft.com