A range of pre and post-retirement planning solutions designed to maximise the use of your available tax allowances and manage your future income needs.
This is a tax-efficient way of saving towards providing for an income and lump sum when you retire.
Before setting up an individual pension plan, you should check to see if your employer offers you access to a scheme, which can be occupational or a workplace pension arrangement. It usually makes sense to join your company pension if your employer is contributing.
Under current rules, you may receive a State Pension in addition to your own arrangements or those provided by an employer. By 2018, State Pension age will be 65 years old for men and women. From December 2018, the State Pension age for everyone will start to increase, reaching age 66 years old by October 2020.
For most people, it is unlikely that relying on the State Pension will be sufficient to meet their expectations in retirement. Setting aside additional provisions will offer some peace of mind, paying into pension plans is a tax-beneficial way of saving for the future.
The earlier you start contributing into a pension arrangement the more time you will have to accumulate the funds to facilitate your future retirement. Starting to contribute at a later age will usually mean that you have to make much higher contribution levels to meet your future needs.
An approved pension arrangement is set-up with a suitable pension provider and you then decide how much you wish to contribute.
You should ensure that your contributions are affordable and that you are able to set these aside for the long-term. Access to your pension fund is not available currently before age 55 years old, rising to age 57 years from 2028.
Contributions can be paid monthly or ad hoc. You will usually receive tax-relief on your personal contributions at your highest marginal rate.
When you decide to take benefits from your personal pension plan, you can choose between entering into a Flexi-Access Drawdown arrangement, purchase an Annuity or a combination of options. The most suitable option for you will depend on many factors at that time, including your attitude to investment risk, size of funds you have accrued and your personal and financial circumstances.
If you are not requiring a guaranteed income, looking for greater flexibility and willing to accept exposure to ongoing investment risk, then Flexi-Access Drawdown (Income Drawdown) may be suitable for you.
As with an annuity, you can first withdraw up to 25% of the value of your pension fund as a tax-free lump sum. Any additional amounts withdrawn are subject to income tax at your highest marginal rate.
Death benefits are usually more attractive than those provided by an annuity and under the new rules from 6th April 2015, these can be paid to any nominated beneficiary tax free if the member dies before the age of 75 years and subject to income tax if the member dies after age 75 years.
A conventional pension annuity is a way of converting your accumulated pension funds into a secure guaranteed income without exposure to investment risk. The annuity is provided by an insurance company who are then responsible for paying your income for at least the rest of your life.
You may be eligible for an enhanced annuity depending on your health and/or lifestyle at that time.
You can elect to convert part of your pension funds into an annuity whilst still holding part of your funds within a Flexi-Access Drawdown scheme. There are also a range of investment funds available through Flexi-Access Drawdown plans that offer some underlying guarantees to help limit your risk exposure, although these do attract higher management charges.
In certain circumstances, you may decide to encash your pension funds subject to the appropriate income tax charges. However, you should also seek professional independent financial advice before deciding to do so.
We are able to guide you through all the available options, both whilst saving towards your future retirement and then when you wish to start taking benefits from your personal pension plan.
As independent advisers, we have access to providers from the whole of the market and can advise you on the most appropriate investment strategy for your needs. We assess product charges and offer you access to competitively priced plans so that you can maximise your investment returns.