Monthly Archives

April 2017

Could you Benefit from a Pension Review?

Could you Benefit from a Pension Review?

By | Lincoln | No Comments

As with any long-term plan, financial or not, it is good practice to regularly review your plan to ensure it is still the best option for getting the best results. This is especially true when it comes to pension planning, reviewing your pension will help you monitor the performance of your pension plan and make amendments accordingly.

If like many people, you have not reviewed your pensions since they were set up or for some considerable time, it may be time for a pension review. To ensure you have the best pension planning strategies in place, it is advisable to seek independent financial advice that is tailored to your unique personal circumstance and financial goals. Our recommended financial advisers provide pension advice in Lincoln and can help you review your pensions, track lost pensions and devise a pension plan that is best suited to you.

Benefits of reviewing your pension?

As people are living longer, our pensions have to work harder than the pensions of our parents and grandparents. It is not uncommon for retirement to last for 30 years, meaning our pensions must provide an income for a longer period of time. To ensure you are getting the most from your pensions and are making use of all available options and freedoms it is imperative to regularly review your pensions.

It has never been more important to not rely on your State Pension as your sole retirement income, at its fullest amount the New State Pension is currently £159.55 per week which is unlikely to be enough income for a comfortable retirement. It is good practice to treat your State Pension as a top-up to your private or workplace pensions.

Working with an independent financial adviser to perform regular pension reviews will help you understand your current position and the action that needs to be taken to ensure you have a financially secure retirement and can live the lifestyle you want in your later years. A pension review may also help you trace pensions you have lost track of such as workplace pensions with an ex-employer.

Undertaking a pension review will give you the peace of mind that your pensions are working as hard as you are, so you can enjoy a good income in retirement and live comfortably in your later years. Pension planning often begins as soon as we start our working life and what was a good solution some years ago, may not be so favourable now, a pension review will help you identify what is working for you and what other solutions are available.

Is it time for a pension review?

To help you determine whether it could be time to review your pension, ask yourself the following questions:

  • What charges you are paying for your pension?
  • What investment returns are you receiving from your pension?
  • How much retirement income will your pension generate?
  • Have you reviewed your pension in the last 5 years?
  • What age will you retire or be able to afford to retire?

If you are looking for independent pension advice in Lincoln and the surrounding areas, we can help you find the right pension adviser to help you with all aspects of pension planning and reviewing to ensure you have the most effective and efficient strategies in place.

At Pensionadvice.org we can help you find a registered financial adviser for pension advice in Lincoln. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.

QROPS and Moving Back to the UK

What Can You Do with Your QROPS if You Move Back to the UK?

By | QROPS UK | No Comments

Seeking warmer climates, cheaper cost of living and a more relaxed lifestyle, when Brits make the decision to relocate to another country, many have the intention of it being a permanent move. However, for some this is not always the case and unforeseen circumstances can see some expats deciding to move back to the UK for career progression, to be closer to family or for health reasons.

Those relocating abroad often transfer their UK pensions to a Qualifying Recognised Overseas Pension Scheme (QROPS) to benefit from reduced tax liability, increased flexibility of pension income and greater tax efficiency. But, when moving back to the UK many are left wondering what they can do with their QROPS.

If you have moved overseas and are thinking of moving back to the UK you may be left wondering what happens to your QROPS in the UK and whether you can transfer your QROPS back to a UK pension scheme.

Seeking advice from an independent financial adviser will help you to gain a clearer understanding of the different options available regarding your pension and QROPS in the UK and will ensure that the most effective retirement planning strategies are in place for your personal circumstances.

While QROPS can be left as they are in the country you have been living and where they were set up, it may not be the most effective solution and transferring your QROPS to a UK based pension scheme may be more beneficial.

Transferring your QROPS in the UK

If you are thinking of transferring your QROPS back to the UK, two of the most effective solutions you may want to consider are transferring your QROPS to a UK workplace pension scheme or to a Self Invested Personal Pension (SIPP). To be eligible for these types of pension scheme you would need to be working when you return to the UK and should seek independent financial advice to ensure you are making the most effective decision for your personal circumstances.

Transferring your QROPS to a SIPP may offer cost efficiencies over leaving your QROP in its country of origin. Typically, QROPS have greater running costs than a SIPP, transferring a QROPS to a SIPP is usually straightforward and involves making an application to the scheme trustees of your QROPS to request permission to make the transfer.

If you are planning to or have already moved back to the UK and are looking for advice on QROPS in the UK, we can help you find the right pension adviser to help you plan for your future and provide a good level of income for your retirement. It is always recommended to seek advice before transferring your QROPS in the UK to ensure you are aware of the benefits of each option and any exit fees that may be applicable.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients to provide support and guidance on all aspects of pension advice including advice on QROPS in the UK and what options are available should you move back to the UK.

At Pensionadvice.org we can help you find a registered financial adviser for QROPS in the UK. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.

QROPS UK Pension Transfer

Should you Consider a QROPS UK pension Transfer Overseas?

By | QROPS UK | No Comments

British expats or international workers with UK pension rights should consider whether a Qualifying Recognised Overseas Pension Scheme (QROPS) could be beneficial to them. Those with UK pension rights who are living away from the UK permanently or those looking to retire abroad could benefit from transferring their UK pension to a QROPS.

QROPS are often also known as offshore pensions as QROPS providers operate from financial centres outside the UK. Although QROPS in the UK are not bound to the restrictions of UK tax laws, they are recognised by HMRC and should certainly be explored by individuals considering an overseas move.

Transferring your QROPS UK pension

There are many benefits of a QROPS UK pension transfer and an independent financial advisor will be able to advise how these may affect your personal circumstances and which would be most advantageous for you. These benefits include:

  • Reduced tax liability
  • Increased flexibility of pension income
  • Greater tax efficiency

Another benefit to consider with a QROPS UK pension transfer is changes in exchange rates and costs associated with currency conversion. A UK pension will pay you income in sterling whether you are living in the UK or abroad, if exchange rates drop you could lose pension income to unfavourable exchange rates and also be faced with high currency conversion rates. With QROPS, your pension income is paid in the currency of your choice, allowing you to avoid exchange rates and currency conversion rates.

If you have or are thinking of moving overseas you may be considering your options with regards to your pension and whether a QROPS UK pension transfer is the most effective solution for you. Seeking advice from a QROPS pension specialist will help you to gain a clearer understanding of the different options available and ensure that the most effective retirement planning strategies are in place for your personal circumstances.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients to provide support and guidance on all aspects of pension advice including advice on QROPS UK pension transfers for British expats.

At PensionAdvice.org we can help you find a registered financial adviser specialising in QROPS in the UK. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.

A Guide to Workplace Pensions

A Guide to Workplace Pensions

By | Essex | No Comments

A workplace pension is a way of saving for your retirement that is arranged by your employers, these may be called occupational pensions, works pensions, company pensions or work-based pensions. If you join a workplace pension, a percentage of your pay is automatically contributed to your pension scheme every payday and in most cases your employer will also make monthly contributions to your pension scheme.

The amount of personal and employer contribution will vary depending on the rules of your pension scheme, but your employer will provide full details on the rules before you enter into a workplace pension scheme. Before making the decision to join a pension scheme it is good practice to seek pension advice from an independent financial adviser to ensure you are making an informed decision and making the best decision based on your circumstances.

If you are looking for independent pension advice in Essex, we can help you find the right pension adviser to help you plan for your future in these uncertain times and provide a good level of income for your retirement.

The financial advisers we recommend are experienced in retirement and pension planning and regularly work with their clients to provide support and guidance on all aspects of pension advice in Essex.

Different types of workplace pensions

While the names may vary depending on the provider, there are three main categories of workplace pensions, they are:

Defined benefit pension schemes

These types of pensions provide retirement benefits based on your earnings and length of time you have been a member of the scheme. Your earnings may be defined differently to the amount shown on your payslip depending on your pension scheme. Your employer will provide full details of the scheme, it is good practice to seek financial advice before
joining any pension scheme.

Defined contribution pension schemes

These pension schemes take the contributions made by you and/or your employer and invests them into a range of investments, depending on your scheme you may be offered a choice about these investments. The benefits you receive at retirement depend on the level of contributions made, how long they have been invested and how the investments have performed.

Cash balance plans

Cash balance plans include parts of both defined benefit and defined contribution pension schemes. A cash balance plan may provide you with an income in retirement or a tax-free cash lump sum and an income.

What if you change jobs?

If you change your job your workplace pension still belongs to you, if you no longer contribute to the scheme the money will remain invested and you will receive pensions payments when you reach the pension age as set out in the scheme.

If you already have a workplace pension with an old employer you will still be able to start a new workplace scheme in your new job and may be able to carry on making contributions to your old pension or combine the new and old pension schemes. It is recommended that you seek pension advice from an independent financial adviser before making any changes to your pensions.

At PensionAdvice.org we can help you find a registered financial adviser for pension advice in Essex. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances and meets your financial and retirement objectives.

What Can You Do With Your Pension Pot?

What Can You Do With Your Pension Pot?

By | Lincoln | No Comments

If you are nearing retirement age, you may be considering what you can do with your defined contribution pension pot. There are a variety of options available to you and typically you can take 25% of your pot as a tax-free cash lump sum, but what can you do with the rest?

There are many ways you can take your defined contribution pension pot, to ensure you are making the best decision to suit your needs and personal circumstances it is good practice to seek pension advice from an independent financial adviser to ensure that you have the most effective and efficient pension planning strategy in place that is tailored to your personal financial situation and provides a sufficient income for your retirement.

If you are looking for independent pension advice in Lincoln and the surrounding areas, we can help you find the right pension adviser to help you plan for your future in these uncertain times and provide a good level of income for your retirement.

The financial advisers we recommend are experienced in retirement and pension planning and regularly work with their clients to provide support and guidance on all aspects of pension advice in Lincoln and the surrounding areas.

Let’s take a look at some of the solutions that may be available to you to give you a better understanding of your options before speaking to a financial adviser.

Leaving your pot untouched

When you reach your selected retirement age you do not have to start taking money from your pension pot, you can leave your money invested until you need it. Leaving your pension pot untouched may be a viable option if you continue to work after your selected retirement age and leaving it invested could mean that your pension pot could grow and you could have more money to last a shorter length of time. If you decide to leave your pension pot untouched, you would not be liable to pay tax on your pension pot.

Buy an annuity

You can use the money you have saved in your pension pot to buy an insurance policy called an annuity that guarantees you an income for the rest of your life – with no restrictions on how long you live. It is possible to take 25% of your pot as tax-free cash and buy an annuity with the other 75%. You would be liable to pay tax on your annuity income.

Flexi-access drawdown

This type of drawdown provides you with an adjustable income from your pension pot, which means you can take a regular income from your pension pot but are able to make changes or take cash sums if needed. You are able to take 25% of your pot as a single tax-free cash sum, the remaining 75% is invested to give you a taxable income.

Take small cash sums

It is possible with some but not all pension providers to take smaller sums of cash from your pension pot, how much and when you take it is up to you. Each time you release a small chunk of money, 25% of that sum is tax free and the rest is taxable – meaning that your 25% tax-free amount is paid over a period of time rather than in one lump sum. It is important to mention that some pension providers may charge a fee for taking out cash.

Take the whole pot in one go

It is possible to cash in your pension and take your pot in one go by taking your whole pension pot as cash, this would break down into 25% being tax free and the remaining 75% would be taxable. While this may seem attractive, it would mean that your pension would not provide a regular income.

It is imperative to seek independent financial advice before making any changes to your pension pot and to ensure you are making the best decision based on your needs and financial objectives.

At Pensions.org we can help you find a registered financial adviser for pension advice in Lincoln and the surrounding areas. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances and meets your financial and retirement objectives.

Using your Home as a Retirement Pot

The Pros and Cons of Using your Home as a Retirement Pot

By | Essex | No Comments

Many believe that their home will provide a sufficient income for their retirement and research suggests that homeowners save less into their pensions than people who rent their properties. The research by the National Institute for Economic and Social Research found that people with mortgages to pay off are saving less into their pensions, resulting in an average of 15% less pension income in retirement.

While it can be argued that paying into a mortgage is an investment in itself, the value of your property at the time of retirement may not be as much as you expected due to fluctuations in the housing market. House prices tend to increase for long periods between each crash, giving the perception that property always increases in value.

Investing in property could pay off and provide a good level of income for your retirement, but it is not guaranteed so it is important to not put all of your eggs into one basket and consider paying into a pension.

It is imperative that you seek pension advice from an independent financial advisor to ensure that you have the most effective and efficient pension planning strategy in place that is tailored to your personal financial situation and provides a sufficient income for your retirement.

If you are looking for independent pension advice in Essex, we can help you find the right pension adviser to help you plan for your future in these uncertain times and provide a good level of income for your retirement.

The financial advisers we recommend are experienced in retirement and pension planning and regularly work with their clients to provide support and guidance on all aspects of pension advice in Essex.

Pensions Vs Property

While property remains a worthwhile long-term investment, it is important to avoid pouring all of your money into your home at the expense of your pension. Pensions offer many benefits over property such as:

  • Tax relief
  • Employer contributions
  • Lower volatility
  • Greater access and flexibility

Many people use their property as retirement income by downsizing to a cheaper property or renting out rooms, it may also be worth considering equity release. Equity release is the process of turning some of the value of your home into spendable cash while continuing to live in the property, either through a lifetime mortgage or homer reversion plan. Before releasing equity in your property, it is imperative you seek financial advice to ensure you are making the best decision based on your circumstances and to explore other options that may be available to you.

At Pensions.org we can help you find a registered financial adviser for pension advice in Essex. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances and meets your financial and retirement objectives.

Pension Planning

Pension Planning for an Uncertain Future

By | Essex | No Comments

While many of us dream of our retirement and plan how we will spend our days when work is no longer a consideration, many of us find planning our pensions a difficult task. From not knowing which pension type is best suited to our needs to how much we should be contributing.

This becomes even more complex when faced with an uncertain future, such as changing pension rules and the uncertainty of a post Brexit UK – how can you plan your pension, when you are unsure what the future will bring?

It is imperative that you seek pension advice from an independent financial advisor to ensure that you have the most effective and efficient pension planning strategy in place that is tailored to your personal financial situation and provides a sufficient income for your retirement.

If you are looking for independent pension advice in Essex, we can help you find the right pension adviser to help you plan for your future in these uncertain times and provide a good level of income for your retirement.

The financial advisers we recommend are experienced in retirement and pension planning and regularly work with their clients to provide support and guidance on all aspects of pension advice in Essex.

What can you do with your pension pot?

For those that are aged 55 and over you can access your pension pot in three ways:

  • As a cash lump sum (minus tax at your marginal rate)
  • By purchasing an annuity (a guaranteed income for life)
  • By investing in a drawdown plan (regular and flexible income from your pension pot)

While these may seem like a simple set of choices, it is always best to act on the advice of an independent financial adviser, rather than on a whim or on a gut feeling. Making an ill-informed decision about your pension could be rather costly and could make a big impact on how much income you will have in retirement.

Working with an independent financial adviser will help you gain a clearer understanding of how each of these options work and which is best suited to your circumstances and the objectives you want to achieve for your retirement. A financial adviser will likely work with you to help you understand the behavioural and technical issues of pension planning and help you balance the ‘what I want’ with the ‘what I need’.

For example, taking a cash lump sum at 55 may give you the income you want at the time you want it, but what happens if you live longer than expected and run out of money – this is where a financial adviser can guide you to make decisions that take what you want and what you need into consideration and devise an effective strategy taking your wants and needs into account.

Planning for an uncertain future

Aside from your own wants, needs and objectives you should also take into consideration the changes that are likely to happen in the coming years and how they could affect your pension planning.

It is thought that when the UK leaves the EU both the State Pension and private pensions could potentially be affected. Currently, the value of the state pension is protected by the triple lock – which guarantees annual rises in the state pension by whatever is the highest of price inflation, average earnings growth or 2.5 per cent.

If the triple lock was to be scrapped post Brexit it could mean those relying on their state pensions as a form of income for their retirement could receive less than they thought. It is also thought that Brexit could cause a crash in the stock market which could affect the value of private pensions. A financial adviser will be able to advise you on the best way to plan and safeguard your pension in an uncertain world.

At Pensions.org we can help you find a registered financial adviser for pension advice in Essex. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances and meets your financial and retirement objectives.

SIPPs Vs QROPs in the UK

Which Pension Scheme is Best for You: SIPPs Vs QROPs in the UK

By | QROPS UK | No Comments

There may be several reasons why you are considering transferring your UK pension, whether you are moving back to the UK or simply trying to get the most from your pension fund it is imperative you consider all the options available to you. While there are many benefits to QROPS, depending on your personal circumstances and with the new rules coming into effect this year, it may be beneficial for you to look at other pension schemes.

A QROPS and a SIPP are now more similar than ever, all though there are still some distinct benefits of having a QROPS if you are living overseas. With rules frequently changing what works for you now may not be so favourable in the next couple of years, so it is imperative that you regularly review your arrangements and seek independent financial advice.

As an international financial advisory and pension transfer specialist, the experienced team of advisors at Prism Xpat can support and guide you through all aspects of transferring QROPS in the UK to ensure you have the most appropriate and effective strategies in place.

How Do SIPPs & QROPS Compare?

  QROPS SIPPs
Full name Qualifying Recognised Overseas Pension Scheme Self-invested Personal Pension
Jurisdiction Can be held in a tax advantageous jurisdiction outside the UK UK only
Cost Depends on size of fund Depends on size of fund
What if you move back to the UK? If kept once you moved back to the UK it would be treated as a SIPP No changes
Before retirement Up to 30% pension lump sum free from UK tax from the age of 55 (in some cases earlier). Tax may be due in your country of residence if outside the UK 25% lump sum free from UK tax after 55. Tax may be due in your country of residence if outside the UK
Before age 75 Income drawdown Income based on GAD rate or flexible drawdown
After age 75 No change No change
Income tax If you live outside of the UK, you will not be subject to UK income tax but will be subject to local income tax If you live outside of the UK, you will not be subject to UK income tax but will be subject to local income tax
Inheritance tax Not subject to UK inheritance tax Not subject to UK inheritance tax

It is always recommended to seek independent financial and pension advice before transferring a QROPS in the UK to ensure you understand the solutions available to you, the benefits of each and any exit fees you may occur when exiting your QROPS.

If you are thinking of moving back to the UK and are looking for independent advice on QROPS in the UK, the specialist team at Prism Xpat can advise you on your options and provide a formal recommendation on your optimal course of action. Get in touch to discuss transferring QROPS in the UK.

Self-Employed Advised to Plan for Retirement

Self-Employed Advised to Plan for Retirement

By | Lincoln, Lincolnshire | No Comments

It is anticipated that many self-employed workers do not have sufficient pension saving plans in place to provide an income for their retirement. While many employed workers have had the opportunity of auto-enrolment workplace pension schemes, this initiative does not include the self-employed meaning they need to set up their own pension savings plan to ensure they have a sufficient income in retirement.

Although, for many self-employed workers this can be a difficult task. Variable income plays a big part in why self-employed workers are unable to commit to regular retirement savings. Not knowing what they have coming in each month, makes it much harder to calculate what they can afford to save each month. And with the absence of employer contributions their pension pots may grow slower than someone who is employed.

If you are self-employed it is good practice to seek pension advice from an independent financial advisor to help you understand and determine your financial situation and help you to implement pension planning strategies that will help you reach your retirement income goals.

The experienced team of independent financial advisors at Castlegate provide pension advice in Lincoln and across the East Midlands. We regularly work with self-employed workers to provide support and guidance to ensure they have the best retirement planning strategies in place for their personal circumstances and financial objectives.

Our independent financial advisors provide pension advice in Lincoln and the surrounding areas to ensure you have the most efficient strategies in place and help you choose the most suitable type of pension for your requirements.

As a self-employed worker you will still be eligible to claim the state pension, for many this will not provide an adequate income for their later years – making it imperative for the self-employed to make additional plans for their retirement. Also, it is important that the state pension is not relied upon as in the future it may not exist in the capacity it does today.

Types of Pensions for the Self-Employed

The majority of self-employed workers use a personal pension for their pension savings, there are three types of personal pension:

A Personal Pension Plan

– A personal pension plan helps you save money for retirement and is available to any UK resident who is under 75 years of age.

A Stakeholder Pension Scheme (SP)

– A Stakeholder Pension is a type of personal pension plan designed to provide an optional lump sum and income in retirement.

A Self Invested Personal Pension (SIPP)

– Unlike a standard personal pension, a SIPP holder has a much wider choice of assets to invest in, each of which can be selected to meet the individual’s personal circumstances and requirements.

Each of the different types of pension plans have their benefits and the one that is best suited to your requirements will depend on your personal and financial circumstances. It is recommended that you seek advice from a regulated financial advisor such as Castlegate, who provide pension advice in Lincoln and across the East Midlands.

If you are looking for pension advice in Lincoln or across the East Midlands for support and guidance with retirement planning, please do not hesitate to get in touch to talk about the most appropriate investments products for your personal circumstances and financial objectives.