Understanding the best way to save for your retirement and the countless options available when you retire can be one of the most confusing financial matters to deal with, but it doesn’t have to be.
We know that every year in the UK, thousands of savers miss out on opportunities to maximise their retirement income prospects through an apparent lack of clear and concise information, and these days of course, you don’t have to retire to start drawing on your pension.
Here we take a brief look at the different ways to save and plan for your retirement:
Saving for Retirement
For those looking to save for their retirement, usually one of the best places to start is your place of employment. This is because your employer is likely to pay into a scheme as well, often matching the contributions you make. There may also be additional benefits made through joining such as free life cover.
For these reasons we would always ask you to consider the options available through your place of employment before considering any alternatives.
With the rolling out of Workplace Pensions, more and more people will have access to a Pension Scheme of some description via their place of work. For those who do not, there are lots of options to consider, and our advisers are ideally placed to help.
Some things to think about
As a starting point, it may be a good idea to carry out a budget planning exercise. Look at your current monthly expenditure and consider which items are likely to end when you retire, which ones will continue and which expenses will increase. For example, you may not need to run two cars or need a car at all but you may find yourself spending more money on leisure activities.
Whatever your objectives or goals for retirement are, our consultants are ideally placed to help you find the most appropriate solution or combination of solutions to help meet your personal retirement planning needs.
Deciding to transfer from one Pension Scheme to another is fraught with danger. You need to be confident that the transfer will benefit you financially and that you are not moving away from a scheme that is already better than the one you are moving to. That said, there can be some clear financial benefits by considering a transfer and sometimes the benefits can be significant.
If you are unsure about any of these matters then you should seriously consider a pension review and taking advantage of our free Needs Analysis Service. Often people do not review their previous pension schemes only to find out at a much later date, something could have been done to improve them.
During your initial meeting with us, we will gain your permission to contact the company(s) that currently looks after your pension savings. We will ask lots of questions to obtain a detailed reply in writing.
One of our specialists will analyse the data provided to establish if there are matters to address and where there are, we will discuss them with you along with an explanation of your options. If you ask us to help you further your consultant will explain the next steps and agree with you the costs for the additional services.
Deciding to transfer a pension should only be made following a very careful assessment of the benefits of doing so giving consideration to all costs involved. A transfer should only ever proceed where there is clear demonstrable evidence of it being in your best interests after taking into account the cost of advice.
For certain types of transfer your consultant is required to hold specialist qualifications providing the required license to give advice in this complex area of financial planning.
Accessing Retirement Benefits
Anyone over the age of 55 is legally entitled to start drawing on their retirement benefits and these days, you don’t have to retire to do so. With the new flexibilities bought about by the April 2015 pension reforms, there is now even more choice available than ever before.
Deciding to commence retirement benefits could be one of the biggest irreversible decisions you will ever make and getting it wrong could cost you for the rest of your life. But did you know that the majority of people making this decision miss out on the opportunity to secure higher levels of tax-free cash and income through being unaware of their wider options?
We can help you choose the right options.
Did you know…
- Smokers could receive a much higher pension compared to a non-smoker
- There are ways to improve Final Salary Scheme benefits
- Your postcode can affect the amount of pension you will receive
- You could leave some of your pension fund to your children
- Your current and past health status could entitle you to a higher pension
The new pension reforms at face value may appear straight forward but the reality is that this is far from the case. Those thinking of utilising the new freedoms need to be wary of the tax implications of doing so as well as considering the longer term impact on providing income in retirement. After all, this has always been the whole purpose of funding a pension arrangement to begin with.
The new reforms also bring new planning opportunities in respect of Inheritance Tax Mitigation and being able to pass on wealth to future generations.
Whilst we welcome the new reforms through a belief that people should be allowed such freedoms of choice, it is apparent that the options available and the decisions to be made are now more complex than ever before. Our professional advice could prove invaluable in helping you to get it right.
Tax planning is not regulated by the Financial Conduct Authority.