Pensions are simple in concept, but can be complex in practice. It is vital to seek expert advice in order to ensure that correct planning is arranged.
At its most basic a pension is a fund that you build up over your working life in order to provide income for yourself in retirement.
While most people can rely on some level of State Pension, the maximum Basic State Pension amounts to only £6,203.60 (2016/17) ,* therefore most people consider arranging additional pensions an essential part of their financial planning.
The Pensions Planning Process
In order to assess your position and advise you correctly, we will need to understand your previous history and any existing pension contracts you may have.
In short, we conduct an audit of your present arrangements. We assess the level of pension that your present arrangements might expect to provide at retirement and then, if there is a gap between what you want and what you might get, advise you as to how best to invest with the aim of providing the extra retirement income you need.
Pensions - historical complexity (why we need all your information).
Be aware that since the 1970s there have been many, many, types of pension, and sometimes different types of scheme could have been given the same name. For example there were retirement annuities, which were sometimes called, for marketing purposes, Personal Pension Plans. Then the Government created a new legal structure called Personal Pension Plans. Result - confusion. Add in Group Schemes, Group PPP, Money Purchase Schemes, S32 Buyout Policies and more, and you can see why this is a complex area.
Maximising Existing Pensions
In the course of a career you might have accrued various pensions with different employers, or through periods of self employment. This is a complex area, but we strongly recommend that you supply us with all your pension documents so that we can assess them. In some cases consolidation or transfer may be a good idea.
For most people, taking benefits is a simple matter of calculating the total value available, and then taking some as tax free cash and some as income (normally through a pension, or annuity).
Pension eligibility depends on personal circumstances. Tax rules and allowances are not guaranteed and may change in the future. The value of pensions can fall as well as rise and you may not get back the amount you originally invested.
You can use the government’s free and impartial guidance service, Pension Wise, to help you with your pension options. Visit the website at www.pensionwise.gov.uk or call on 0800 138 3944.