Pensions 2016-12-21T15:54:36+00:00

RETIREMENT PLANNING: PENSIONS

PLEASE NOTE: THE VALUE OF PENSIONS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. THERE IS ALWAYS A RISK THAT YOU WILL GET BACK LESS THAN YOU INVESTED.

TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.

Should I get a pension?

Yes. The later years of life often bring different challenges that can be costly. Having a stream of income during these times is very important to avoid financial difficulty. Most of us want to enjoy retirement as a peaceful time. Pensions provide the finances to help make this possible. The age you retire and type of pension you chose is up to you. Planning for the future, however, is a must.

What pension schemes exist?

State pensions can be depended upon not to run out regardless of the number of years you spend in retirement.

Work-place pensions often incorporate employer contributions to grow the pot more rapidly as you contribute.

The flexibility of private pensions versus state pensions is indeed an attractive feature, as a portion of the pot can be taken out tax-free in a lump sum. Leveraging these different schemes together brings durability and flexibility.

Starting in October 2012, the government introduced ‘auto enrolment’.  Over a period of time the vast majority of workers will be automatically enrolled in a workplace pension scheme, unless they have opted out. To opt out is generally not recommended, as such schemes provide a source of security for the future.

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How does a typical pension fund work?

Pension schemes invest in a variety of financial instruments to grow the value of the investment over time. Some funds will be more aggressive and yield greater growth, while others offer more secure investments offering potential lower returns. Typically, with the opportunity for great gains comes the opportunity for great losses. The risk behind the fund you chose should be taken into account as you may lose money you have invested and it is always best to seek advice from a financial advisor when making choices regarding your pension fund.

How much money should I save?

It is recommended to begin contributing to your pension as early in life as possible. Allowing more time for the money to grow will yield a larger pot at the end. Workers should contribute as much as they can without straining their current financial condition.

Consider the lifestyle you desire for retirement and compare that to the calculated income. If the two match, you are investing enough.

Please note that the government have however put in place restrictions on the amount that you can contribute towards your retirement planning.

How do I get a pension?

To understand the pension options available to you at work, check with your employer on their current offerings. For additional private pensions, you will need to work with a financial services company. The variety and financial implications can be daunting. For this reason, seeking personalised financial advice on this important topic is highly recommended.

How can I access my pension fund?

The rules surrounding how you can access pension funds have recently changed and now offer far more flexibility.

  • Cashing in your pension
  • Capped drawdown
  • Flexi drawdown
  • Taking an annuity

However, none of these options are available to you until age 55, except in exceptional circumstances.

Retirement Planning Tools and Services

  • Be sure to download our free guides on pensions and retirement planning here
  • Calculate your pension income options with our pension calculator here
  • To find out if your pension is going to provide you with the lifestyle you desire upon retirement, get a review from one of our experienced financial advisors, by requesting a call back here