Retirement Planning

Planning for retirement has never been more important. Thanks to a rise in life expectancy, a low-interest-rate environment and a reduction in generous pensions from employers, it’s never been so challenging. 

More and more, the burden falls on individuals to secure their own futures with a realistic retirement plan. 

Increased life expectancy provides the opportunity to enjoy more of life and spend time with loved ones, but it does mean careful consideration must be given to retirement planning as early as possible. This will help you plan for a comfortable retirement, and the financial planners at Francis Clark Financial Planning are on hand to help. 

Pension & retirement planning: where should you start?

The UK government now mandates that all employers provide a pension scheme for their employees. This is a great start for your pension saving but it may not be enough to maintain your standard of living post-retirement. This is where talking to a financial planner to establish your goals in retirement will help you build a plan.

Retirement planning for self-employed individuals is especially important as there is no workplace pension to join. This is where our financial planners can help you find the pension that is right for you.

Working with our financial planning team can help you understand your state pension forecast and any existing pensions you hold to plan what steps you need to take towards achieving your retirement goals.  

What are the benefits of saving for a pension?

Pension saving as part of your retirement plan is a great way to build a capital sum for your future with many benefits: 

  • 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 your pension scheme fund from age 55 
  • Access the first 25% of your 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 in a tax-efficient way to your beneficiaries on death

When should you start planning for retirement?

Your pension savings are likely to form the core part of your retirement income alongside your state pension and any other investments you may hold. Where possible, starting your pension as soon as you begin working is optimal. However, it’s understandable that many people don’t begin to consider their pension until later in life. So, the second-best time to start planning for retirement is now.

Our chartered financial planners will help you figure out the best way of saving for retirement based on your unique personal situation. This will help you understand your target income post-retirement and create a plan of how to achieve it. Lifetime financial forecasting projects your current assets and income together with your current and future expenditure and liabilities which can be a useful tool to help you understand if you are on track or not for a comfortable retirement. Lifetime financial forecasting can include later life planning for care fees which is becoming more and more important as life expectancy increases.

Making a start as early as possible will increase your chances of achieving your retirement goals. We can help you explore how to make the most of your money through private pensions and other avenues such as investment planning.

Can you access your pension scheme early?

The state pension age has risen in recent years and the current retirement age is 67. Many of us dream of retiring before this. 

New pension freedoms have transformed the pensions landscape. There is now more choice than ever when it comes to shaping your retirement plan to best meet your needs and circumstances.

Under new rules, individuals with a defined contribution pension, which includes private pensions and some workplace pensions, can access it from the age of 55; due to increase to 57 in 2028. This means you can access your entire pension pot and use it at your own discretion. However proper planning is advised so you don’t end up paying excess tax.

The ability to access pensions from 55 has provided a huge incentive, for those who want to retire early, to plan ahead. 

It’s never been more important to seek out professional financial advice from qualified experts. We can help you understand how to make the best use of your retirement savings.

As dedicated pension specialists we can provide tailored advice on:

  • Establishing your future requirements and financial aspirations
  • Financial independence – planning for a secure and safe financial future
  • New pensions freedoms – using your pension pot wisely
  • Retirement income options – is an annuity or drawdown best for you?
  • Tax relief and pensions – how much can you contribute and receive tax relief? 
  • Annual allowance – this can vary depending on how much you earn
  • Lifetime allowance- the maximum you are allowed to save over your lifetime without attracting tax charges
  • The State Pension – helping you understand the new rules and your state pension forecast
  • Workplace pensions- how much will your employer’s scheme provide in retirement?
  • Defined benefit schemes – secure income for life
  • Personal pensions including self-invested personal pensions (SIPPs)– tax-efficient saving for retirement
  • Passing your pension onto your beneficiaries tax efficiently

Find out how Francis Clark Financial Planning can help you plan for your retirement

If you would like to discuss how our financial planners can help you with your retirement, our team is just a phone call away. You can contact us on weekdays between 9am and 5pm on 0800 832 1785 or email us at [email protected] anytime. 

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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