The pensions market is an ever changing world, with new legislation and reforms being brought out on a regular basis. This has led to more confusion than ever as you seek the best options available when planning your savings for retirement and what to do when you reach retirement age.
Here are some of the many questions we hear on a regular basis:
- What is a personal pension?
- What are the basic fundamentals that I need to consider?
- Is it tax efficient?
- What would I receive when I retire?
- What are my options at retirement?
- When can I retire?
- Income drawdown, what is it and is it right for me?
- What is an alternatively secured pension?
- How should I save for retirement as a self-employed person?
- I have heard so much about Self Invested Pensions, are these right for me?
- Can I purchase property in my pension?
There are so many more!
Do you fancy the idea of living on the State Pension alone when you retire?
That’s pretty much the prospect for most people unless you make additional pension arrangements, either by setting up a personal pension or by being part of a company scheme.
Before seeking advice on pension provision it’s worth getting the basics straight first.
Why do I need a Pension?
When you retire you will still need food and shelter as an absolute minimum, but of course you will also want to maintain the lifestyle to which you have become accustomed. So, unless you can guarantee a large inheritance or windfall, then you need to provide yourself with a secure income for the rest of your life.
A well prepared pension plan which is regularly reviewed, should go some way to providing you with a reasonable level of income in retirement.
A pension plan requires action as soon as possible, so start NOW. If you have already started, take the opportunity to have a closer look at your existing arrangement to make sure that you are on track.
How much are you going to need for your retirement?
The answer to this, of course, depends on your aspirations. What will you want to do? What will the costs of day to day living be for you (and your partner)? What else will you want to do when you have the time on your hands? What expenses will disappear, e.g. children, mortgage repayments etc.
We can help you to come up with a figure and even add in an amount as a buffer against the unforeseen and unexpected. Now you will have arrived at the amount of pension you should ideally be planning for.
I already have a pension so I’ll be fine, won’t I?
It is very important that you review the benefits of your scheme and the status of your pension plan to establish if it is on track to give you the pension you want. If you are in an employer’s scheme you should be able to obtain a statement from your employer outlining the scheme benefits. Alternatively, contact us and we can analyse your current provisions and make any recommendations to achieve your goals.
If you have a personal pension, the level of contributions you have been making to your scheme, investment performance and charges will determine the size of your pension. However, as the years go and your fund increases, the investment returns achieved take on more importance. The larger your fund, the more advice you will need to obtain optimum performance, because every percentage point increase or decrease could potentially represent thousands of pounds.
We would be pleased to regularly assess your benefits to establish whether they will meet your objectives, and make appropriate recommendations.
What type of pension plan should I have?
There is no simple answer as this depends on your employment status, e.g. self-employed, employed or director, and the benefits that are available through your employer’s scheme, if there is one. However, we would be happy to advise you on the most suitable way to save towards your retirement.
If you would like further information on planning for your retirement, please contact us
A pension is a long term investment. Your eventual income will depend on various factors, i.e. the size of your fund at retirement, future interest rates and tax legislation. The value of your investment and the income from it is not guaranteed. It can go down as well as up due to fluctuations in investment markets, and you may not get back the full amount invested.
Levels and bases of, and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.