Pensions

Pensions are an essential part of retirement planning for most of us. Your pension could be the the source of income you rely on most in retirement. None us know how long we will live but many of us will have 15 to 25 years or more in retirement. Have you thought about what you will do. You may want to go travelling, eat out, treat the granchildren, play golf, go fishing, go to football matches and generally enjoy our retirment. How many of these can you afford when you retire?

The is no time like the present. This is especially true with planning for retirment. If you are serious about a better retirement then we can help you create a retirment plan to fit your budget now. The longer you leave your retirment planning the more you will have to invest on a regular basis to acheive a reasonable income in retirement. Don't delay - call us now and speak to one of our independent financial advisers.

It is important to remember that your pension fund will be invested in various assets. Natuarally you should be aware of what these assets are and their inherent risk. You should be aware of your own attitude to investment risk and your pension fund portfolio should reflect your risk tolerance.

Check your risk profile by clicking the link : Retirement risk profile questionnaire

Pension Investment

Although there are many complex issues which need to be taken account of when using pensions to plan for income in retirement they are essentially an investment. Like any other investment, performance matters. With our help you can get a pension that matches your risk profile and is designed to perform.

Although the 6th April 2006 seems like ancient history now the key points of these changes are shown below. People with large pension funds or those who make large payments into their pensions are most affected, but there are other changes too. 

From 6 April 2006, anyone can join any type and any number of pension schemes. 

• All UK residents will be able to pay up to £3,600 gross a year into a pension arrangement and get tax relief. Those with sufficient UK taxable earnings will also be able to pay, and obtain tax relief, up to 100% of these earnings.
• Third parties will be able to make payments on behalf of the pension owner, subject to the owner having sufficient capacity as described above.
• There will be a tax charge of 40% if the total input in a year to money purchase schemes and defined benefit schemes is more than the ‘annual allowance’. For the tax year 2006-07 the annual allowance will be £21 5,000.
• From 6 April 2006 there will no longer be any carry back or carry forward of tax relief on any type of pension plan. 

• There will be a new limit on maximum benefits available across all the member’s pension funds, which will be known as ‘lifetime allowances’
• This is determined at the date benefits are taken, and for tax year 2006-07 this allowance will be £1 .5m. This will go up each year, rising to £1.8m in 2010-11.
• There will be a lifetime allowance charge of 25% on any fund in excess of the lifetime allowance when benefits are taken in the form of a pension. If the excess is taken as a cash lump sum the lifetime allowance charge will be 55%. 

• People likely to have total retirement funds close to or above the lifetime allowance should be able to ‘protect’ the value of their fund against the potential 55% tax charge. There are two types of protection: Primary Protection and Enhanced Protection. People will need to register for this protection between April 2006 and April 2009. 

• Tax free cash lump sums will generally be 25% of the retirement fund from all pension arrangements. Those in occupational pension arrangements where tax-free cash is currently higher than 25% should be able to protect this figure. 

• From 6 April 2006 the minimum retirement age for all pension arrangements will be 50. From 6 April 2010 this will increase to 55.
• Those with contractual rights to start taking benefits before this date may still be able to do so, as will those in serious ill health (as at present). 
• There will be changes to income drawdown plans, where individuals draw an income from the pension fund without having to buy an annuity. These changes will make this pension arrangement more flexible and include a change of name — to unsecured pension’ — as well as changes to the minimum and maximum income that can be taken each year.
• Although income drawdown — or unsecured income — must end at age 75, there is an option to continue in a similar way. This product will be known as an ‘alternatively secured pension’.

 You may wish to discuss the matter further with one of our advisers, particularly if you are affected by them.

How much can you expect to get from the government as a pension when you retire? To find out fill out this form http://www.filewiz.co.uk/aadv/br19printjun04.pdf send it to the Department of Work and Pensions (DWP) at the address provided on the form and all will be revealed. Once you have had a response from the DWP it is possible that you will be motivated to do something to improve your prospects. Planning for your retirement is a prerequisite to a retirement free from financial worry.

Past performance may not be repeated. The value of your investment may fall as well as rise. You may not get back the full amount invested. We will always assess your attitude to investment risk before making a recommendation.

Talk to one of our advisers about the options you have. Call Now on 01732 881188, or alternatively complete the form below.