Right now, retirement might seem a very long way off, but it’s never too early to think about your pension. Ideally, we should all start planning for it from the day we start work. No-one wants to worry about money in their later years and the way to help prevent that happening is to save regularly into a pension throughout your working life.
Despite pensions never being out of the media headlines, many people still leave their retirement planning well into their middle years. However, the earlier you can start building up a fund for your retirement, the less it will cost you. We can give you straightforward advice on all the different types of pension arrangements such as:
Plus, if you’ve had several jobs over your working life, we can help you decide whether you’d be better off moving your pension savings to just one scheme to improve your retirement prospects.
There are some simple but compelling reasons why you should think about pension planning now:
The state pension on its own may not be enough
The full new State Pension is currently £203.85 per week and is based on your National Insurance record. You will need 10 qualifying years to get any new State Pension and 35 qualifying years for the full amount. 1
Tax relief
If you make contributions to a pension, or if your employer deducts your payments from your salary, you automatically get 20% tax relief as an additional contribution into your pension pot.
You can claim additional tax relief on your Self-Assessment tax return for contributions you make into a private pension of:
Start early to see your savings grow
The sooner you start making contributions, the longer your money will have to grow.
A workplace pension is a valuable workplace benefit
If you save into a workplace scheme, your employer should match some or all of your contributions, providing a welcome boost to your pension.
Currently from age 55 (increasing to age 57 in April 2028), there are a number of options available to you including:
So, if you’re self-employed, an employee, work part-time, a company director, run your own business or have accumulated pension pots with past employers, we can offer you help from a qualified pension adviser. After all, retirement should be an enjoyable and fulfilling stage of life, not a time spent worrying about money.
1 Gov.uk 2023
A pension is a long-term investment and the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
That is a personal choice. With a personal pension, arranged by an adviser, your investment is diversified across many asset classes and many countries throughout the world. With property, the money is often in one location and in one asset class (property). Therefore, it is usually considered to be a higher risk approach.
Like all things in the financial world, you must understand the costs and risks associated with your strategy. Talk to your adviser about what is best for you.
It all depends on your expected expenditure in retirement. My cashflow forecasting software can help to determine how much you are likely to need and how much you are likely to need to put away to achieve that goal. None of us can predict the future precisely so these things are always best done on an ongoing basis where we can update it as we go along.
When investing, your capital is at risk and the value can fall as well as rise. You may receive less than you originally invested.
A personal pension plan does not die with you. Anything left in there will be passed to your beneficiaries and, if the pot isn’t emptied by them, on and on though the generations. If you die before the age of 75, the pension will be available to them free of income tax, and they do not have to reach minimum pension age before accessing it.
Tax treatment depends on the individual circumstances of each client and may be subject to change in future.
Currently, you can access your pension at age 55. In April 2028, that increases to age 57. You can access it earlier on grounds of ill health. The circumstances when this is possible will be detailed in the literature you receive from your provider.
No. You can arrange your own personal pension. There are some products out there that are only accessible via an adviser though.
If you meet the conditions for auto enrolment, then yes, it is the law that you are enrolled into a pension scheme. You can opt out if you want to.
All circumstances are different. A good adviser will discuss this with you to see if it’s the right thing. There may be some guarantees held with older pensions that are valuable and would be lost on transfer so in this situation an adviser would be able to help.