Planning your retirement is quite possibly the most important of all of the financial decisions that you will make, especially considering that life expectancy is on the increase and the cost of care is rising rapidly. With those factors in mind, planning your pension and retirement is an investment in yourself through a tax-efficient savings plan that is designed to help you save money for the retirement that you want.
Of course, pensions can be complicated especially when it comes to all the rules and regulations that surround them.
Our advisers will work with you to help you understand what is needed to fund a pension that provides the income you would like in retirement. We take the worry out of how you will cope and help to ensure that you will not be caught out when you should be enjoying your later years of life.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
I have been a client of Richstone Park for over five years and have had fantastic service from Darren and his team. Darren has looked after my personal pensions and investments and also the statutory pension scheme for my employees. I have had the pleasure of recommending Darren to my Family, friends and business acquaintances and I always get great feedback following the recommendation.
P. Jennings-Bates~Private Client
Our advisers will not only set up the pension plan but will also recommend an appropriate investment strategy and review it with you on a regular basis. This point is extremely important as in the past many pensions have been set up and then forgotten, resulting in them holding inappropriate investments as you approach retirement.
If you already hold one or more existing pensions, we can review these for you and suggest an appropriate course of action. If you have multiple pensions, we will look at whether or not it’s cost effective for you to have these consolidated into one plan and help give you a clearer picture of your overall planning.
When you eventually decide to draw your pension, we can provide advice on the many options available. We’ll ensure we explain in the simplest of terms, the tax benefits and risks involved, to ensure that any decision you make is the best possible decision for you and, most importantly, the one which ensures your financial future is protected and you can relax and enjoy your retirement.
For more information on services, and to arrange a no obligation initial meeting to discuss your position and requirements, please get in touch.
It’s very easy to put off saving for your retirement, especially with everyday costs, but with people now living longer, pension planning is becoming increasingly important.
Pensions can often be quite complex which can sometimes deter people from taking out a pension and stop them acting in planning their retirement. Pension’s have become more straightforward with a number of changes in the regulations which has made the pensions process much simpler and easier to understand.
A pension in its simplest form is an investment plan which will provide you with an income once you retire. A pension gives you tax relief on contributions and the investment itself grows essentially free from tax.
You will pay tax on the pension that you take when you eventually retire. For many people however, their rate of tax in retirement will be lower than during their working lives, making a pension an extremely tax-efficient form of saving.
If you take out a pension plan, it will basically work as follows:
You will make payments into a pension fund, payments into the pension plan can be made as a lump sum, on a regular basis, or both. The funds are invested. You can draw your pension from the age of 55 (rising to 57 in 2028) Your pension can be drawn in a way which suits your requirements. There are certain circumstances, in which your dependents may also benefit from your pension plan.
This is personal to you and depends on your own circumstances and the level of income that you would like. This can be affected by your age, your appetite to risk and when you would like to retire. The younger you start the less you will need to pay in to reach your goal.
Flexibility is the key to retirement. In some cases, it may be beneficial from a tax point of view for you to not draw your pension immediately, as it’s now possible for your beneficiaries to ‘inherit’ your pension in a very tax efficient manner.
There are certain options which should be considered when deciding how to draw your pension.
Tax Free Cash
Most pensions allow you to take an element of tax-free cash, typically 25% of your pension fund. If your pension is an occupational scheme that has been in place for many years, the amount you can take may be different.
Annuities
Traditionally, the most common way to draw your pension is by way of an annuity which will provide you with a guaranteed pension for the rest of your life. You can add other benefits, such as a pension for your spouse after your death or the facility to have your payments increase each year. Though, the more ‘options’ you add, the lower your initial annuity payment will be. If you suffer from any medical conditions you may qualify for an enhanced annuity, improving the amount you will receive.
Flexible Drawdown
This is an alternative to buying an annuity. Essentially, you will continue with your pension as an investment, but draw an income from the fund. The amount you can draw is unlimited, but you have to consider both the tax consequences and planning to ensure that your funds last as long as you need them. The benefit is that you have control over your investments, while still retaining the right to convert to an annuity at any time. You are also able to leave any unused funds to your beneficiaries. This option is not without its risks and should be fully discussed with one of our professional advisers.
I'd not seen my previous adviser for a couple of years, I needed better service! Darren took the time to review my pension needs, he explained what I already had and ways that it could be improved based upon my individual profile and needs. I've now completed the transfer to Richstone Park and even have my own login to check the performance of my investments!
S. Tempest~Private Client
