Retirement Planning

Saving for your retirement has never been more important and potentially never as challenging.

With the increase in our life expectancies coinciding with a low interest rate environment and the demise of high-quality final salary employer pension schemes, the burden falls on each of us individually to secure a comfortable future, and retirement planning has never been more important.

All employers must now provide a pension scheme for their employees which is a start. This is helpful to those who are employed but of course self-employed individuals still need to instigate their own pension savings.

Pension saving carries many benefits

Pension saving as part of your retirement plan is a very beneficial way to build a capital sum for your future with numerous attractions such as:

  • Tax relief on personal contributions at your marginal income tax rate
  • Investment growth free of income and capital gains tax
  • Wide range of investment options to suit all circumstances
  • Ability to access the fund from age 55 onwards
  • Access the first 25% of the fund tax free
  • Use the remaining 75% to buy a guaranteed income or leave it invested and drawdown income from the invested fund
  • Assets held within the pension fund are usually exempt from inheritance tax
  • Assets within the pension fund can be passed tax efficiently to your beneficiaries on death

Starting early and targeting an outcome

Your pension savings will almost certainly form the core part of your retirement income alongside your State Pension and other investments you may hold. We will work with you to look at the whole picture and build you a plan to target the income you require in retirement. Lifetime financial forecasting can also be a useful tool to understand how to achieve your future goals.

Making a start as early as possible will increase your chances of building a fund sufficient to meet your needs. We can help you explore how to make the most of your money through private pensions and other avenues such as investment.

At Retirement Planning

The new pension freedoms have transformed the pension landscape and have provided more choice than ever before in shaping retirement plans to best meet individual needs and circumstances.

Under the new rules, those aged 55 with a defined contribution pension (a pension based on how much is paid in) can now access their entire pension pot and use it at their discretion.

This has provided incentive for those approaching retirement to plan ahead particularly as life expectancy increases and later life care becomes part of the financial equation.

Never before has seeking professional advice been more important than the decision on how to best use these hard-earned savings.

As dedicated pension specialists we can provide specialist advice on:

  • Establishing your future requirements and financial aspirations
  • Financial independence – a secure and safe financial future
  • New pensions freedoms – using your pension pot wisely
  • Retirement income options – annuities/types of drawdown
  • Tax relief and pensions – annual and lifetime limits
  • Lifetime allowances
  • The State Pension – new rules
  • Defined contribution pension schemes – providing an income in retirement
  • Defined Benefit Schemes – secure income for life
  • Personal pensions – tax efficient saving for retirement
  • Self-invested personal pensions (SIPPs)

Book Consultation

To book your initial consultation (no cost or obligation), please fill in the form below with your details and one of our financial planning experts will be in touch.

“Aimee took on board that we are not financially savvy. She asked us what we wanted from our retirement and advised the way forward in language we could understand, even enabling us to retire early. No question we asked was queried and was responded to straight away. We have every confidence in our retirement planning thanks to Aimee and her team. ”
Fred and Sandra Ross
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Retirement Planning FAQs

  • What is the difference between a defined contribution and defined benefit (or final salary) pension?

    A defined benefit pension (also known as a final salary pension) is usually set up by your employer. It guarantees you a regular income in retirement, usually based on your salary and the number of years you have worked. The level of income may also increase in line with inflation.

    On the other hand, defined contribution pensions do not offer you a guaranteed level of income. The amount of money you will have in retirement depends on how much you or your employer has contributed and how well your pension investments have performed.

  • How much can you pay into a pension?

    Usually you can pay as much as you earn each tax year into your pension, up to a maximum of £40,000. This is your annual allowance.

    The allowance reduces for people with an adjusted annual income of £240,000 or more, down to a minimum of £4,000. This is known as the tapered annual allowance.

  • What is the tapered annual allowance?

    The usual £40,000 annual pension allowance is cut for people with an adjusted annual income of £240,000 or more. The allowance reduces by £1 for every £2 of income above £240,000, down to a minimum of £4,000. This is known as the tapered annual allowance.

  • What is pension carry forward?

    Pension carry forward lets you pay more than your annual allowance into your pension by ‘carrying forward’ unused allowance from the previous three tax years (as long as you have sufficient earnings). You still will receive tax relief on the payments and it can be useful for those affected by the tapered allowance.

  • What is the lifetime allowance and how much is the tax charge for breaching it?

    The lifetime allowance is the amount you can hold in your pension over your lifetime. The allowance is currently at £1.0731 million. Your pension is assessed against the allowance when you take benefits, die or reach age 75. Any excess is taxed at 25% on top of Income Tax if taken as income, or 55% if taken as a lump sum.

  • What are the tax benefits of pensions?

    Investments in pensions grow free from Income Tax and Capital Gains Tax. Pension contributions are paid from gross (pre-tax) income. Where tax has already been paid on a pension contribution it is refunded. The taxman will automatically top up pension contributions up to your annual allowance by 20% to cover basic rate tax. Higher or additional-rate taxpayers can then claim back any higher or additional-rate tax that they have paid on contributions through their tax return.

  • What are your options for taking an income from your pensions?

    You can normally take up to 25% of your pension tax-free – either as a single lump sum or as a series of smaller withdrawals. You can also take a regular income from your pension by making lump sum withdrawals, buying an annuity or setting up income drawdown.

  • What happens to a pension when you die?

    A defined benefit (final salary) pension will usually stop paying an income when you or, if your pension income passes onto a dependant, your dependant dies. A defined contribution pension can be passed on to your beneficiaries. If you die before the age of 75 the pension will be passed on tax-free. If you die after 75, your beneficiaries will pay their usual rate of Income Tax on any money taken from the pension.

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