Savers need to readdress their approach to private pensions in 2010 – a year in which the general election will shape the financial landscape, says Informed Choice.

Speaking to IFAonline, the company’s managing director Martin Bamford urges savers to take more of an interest in their private pensions and start viewing them as an important investment tool.

With the Surrey IFA’s clients predominantly in the 50-70 age category, he says it is important this group gets a grip on their pension pots in what promises to be an uncertain year.

“Historically, clients don’t seem to have taken much interest in their private pensions, in regard to where the money is invested, what it provides and what kind of returns it makes,” he says. “People need to take pensions more seriously and start viewing them as investment portfolios.”

“Pensions are really investments – the pension aspect relates to the chosen tax wrapper.”

Bamford adds pensions are becoming an increasingly important asset as a result of the plunge in house prices. And he urges a sea-change in attitude with a more individualised approach.

“Rather than passing the responsibility on to an insurance company, savers should take an active part in selecting individual funds in line with their risk profile,” he says.

In terms of 2010, the Informed Choice MD thinks the forthcoming general election will play a crucial role in shaping an uncertain financial landscape. Gilt values, exchange rates and interest rates will all be impacted by the election – which must be called before June 3 – says Bamford.

“Regulatory challenges and economic fundamentals will be the main issues this year – both of which will be influenced by the general election,” he says.

He foresees a year of two halves, with a steady first part bringing few surprises and a second, more volatile, half bringing possible shocks to the system.

An expected increase in interest rates could also see cash recover lost ground.

“Cash has fallen out of favour and we might see a reversal in this trend – but I think it is unlikely it will reach its historical highs again for two or three years.”

He also thinks it unlikely the stock market will repeat the dramatic rally witnessed in the second half of last year which saw the FTSE surge 50% from March.

“It is great confidence has returned, but people should not make investment decisions on the basis of a very unusual year.”

Emerging markets remain an attractive long-term proposition, but he warns against a strategy of putting all investment eggs in one basket.

“The secret of investment is diversification and staying invested,” he sums up.

Meanwhile, family-run business Informed Choice seems to have emerged from last year’s financial storm in good shape and is currently in the process of recruiting three more advisers to its team.

NAEA believes that the market next year will be largely dependent on the availability of lending.

They think that house prices could remain flat, or even drop in some areas, for the first six months of 2010, before picking up again and remaining stable in the second half of the year.

Housing supply is likely to remain stable in the run up to the General Election, after which there are likely to be more houses available for sale, particularly if Home Information Packs are scrapped.

As has happened this year, they predict that a number of buyers will take advantage of lower interest rates and lower priced property. Some buyers are in a very strong position currently if they have access to cash or credit and the ability to purchase without first having to offload their own property.

When we construct comprehensive Financial Planning reports for our clients, the value of property is one aspect we include within our calculations and forecasts. It has been interesting to note recently that many clients have overvalued their main residence when compared to the valuation system we use. Recent increases in average property prices have come largely as a result of limited supply, so in a ‘normal’ supply situation it is unlikely these prices would be anywhere near maintained.

Of course your property should be a place to live first and an investment second (if at all).

Hopefully the temptation of becoming an amateur landlord with the prospect of covering mortgage costs with rental income and then benefiting from a rapid increase in capital values has been proven to be a complete fallacy in recent years. It is always a shame to see investors lured by unscrupulous and unregulated property investment salespeople into taking too much risk with their investment portfolio as a result of gearing (borrowing money to invest) and failing to diversify between the investment asset classes.

Where the NAEA predictions for 2010 are important is in predicting the likelihood of a ‘feel good factor’ which usually stems from property price increases. Whilst residential property is not necessarily a good thing to consider from an investment perspective, it can and does drive the UK economy to some extent.