Pension pitfalls were brought home to us by a second opinion
Published 28/10/2015 | 02:30
I'd like to think that a lot of farmers are not too bad at earning money. We work hard and are prudent. But how good are we at managing it?
Not the small things like shopping around for the best place to buy a pound of nails or a tonne of lime. Or even on-farm capital investment. I am talking about personal financial planning, things like pensions and life assurance.
People are so busy farming that we don't spend much time on this stuff. Maybe we feel it will more or less somehow look after itself. Or we don't have the expertise so it keeps going on the long finger.
Also, a lot of farmers never think of retirement. Even if they do, they probably think they don't really need a pension because of the value of the farm which they think will always generate an income.
But circumstances change, as do perspectives. Like many farmers, my husband Robin took out a personal pension through one of the country's biggest banks. It was 14 years ago. Obviously, the pension was in the bank's own pension arm.
The only time Robin or, more recently, we would ever think about it is when the annual pension statement popped in through the letter box. For a time this looked okay. Its increase in value was modest but at least it was moving in the right direction.
However, in the last couple of years, it has not just stagnated, but is actually falling in value by a couple of hundred euro a year (as levies/charges exceed returns).
What brought this into focus was the contrasting performance of my pension. It is with Standard Life. I took it out nearly 20 years ago when I was working full-time.