Monthly Archives

May 2017

May 30
15

Finding the Best Pension for You

By | Independent Pension Advice | No Comments

When planning for your retirement you will want to make sure you have the most effective pension planning strategy in place to ensure you have a financially secure future, not only for you but for your family too.

One of the first steps in pension planning is deciding which type of pension you want. There are many different types of pension available and understanding the difference between them can be a challenge. Which is why it is advisable to seek independent pension advice to ensure you find the best pension for you.

Not only are there many different types of pension, the rules for each pension scheme can vary from provider to provider, make it even harder to determine which pension is a good fit for you. Working with an independent pension adviser will ensure the pension advice you receive is unbiased and focussed on your goals and objectives.

If you are looking for independent pension advice in your local area, 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.

What are your Pension Options?

In the UK, there are many different types of pensions available. These types of pension will fall into one of two categories; defined benefit and defined contribution. Most of the options will depend upon what your employer offers during your career. Changes to pension legislation has given members more flexibility with their pensions than ever before.

Therefore, there are a number of important points you should consider if you are starting a pension or making changes to your current scheme. It is advisable to seek independent pension advice before making any changes to your pension plan. Below we look at defined benefit and defined contribution schemes in more detail.

Defined Benefit Pension Schemes

Also known as final salary schemes, defined benefit pensions are not generally available to new employees and are generally offered by older, more established organisations. The pension income amount in a defined benefit pension scheme is determined by:

  • Length of time the member has been in the scheme
  • The member’s final salary or salary average (depending on the rules of the scheme)
  • The accrual rate – the defined proportion of your earnings when you retire according to the length of your membership

One of the biggest benefits of defined benefit pension schemes is that they offer increased financial security which is not dependent on investment returns.

Defined Contribution Pension Schemes

Self-invested personal pensions (SIPPs), money purchase occupational pensions and stakeholder pensions are all types of defined contribution pension schemes. They work by the pension member building a pot to provide an income throughout their retirement. The final amount is not defined and is determined by the amount of money contributed to the pot and the investment performance.

While rules may vary from scheme to scheme, most defined contribution schemes work by the member and their employer making regular contributions to build a pension pot. This money is then placed in other investment options such as stocks and shares. While the aim is to grow the pot, there is a risk that the pot value could decrease if there is an uncertain financial market.

Once members reach the age of 55 they can access their pot and would be able to:

  • Withdraw 25% of pension pot tax-free
  • Withdraw the remaining 75% as a taxable lump sum
  • Buy an annuity
  • Take flexible benefits
  • Use a combination of all options

To help you decide which type of pension is best suited to you and your requirements it is recommended you seek independent pension advice to ensure you are making an informed decision and are receiving advice that is tailored to you and your circumstances.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients to provide independent pension advice across the UK. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and will provide sound retirement planning advice.

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

May 26
15

A Guide to Ill Health Retirement

By | Manchester | No Comments

If you can no longer work due to ill health you may be able to take your pension benefits early, this is known as taking an ill health pension. Depending on the rules of your pension scheme, this can apply to those under the age of 55.

Each pension scheme will have its own rules on what ill health or sickness means, but typically you will be considered for an ill health pension if you are unable to carry out your normal job due to physical or mental illness. In the instance that you are terminally ill and have less than a year to live, you may be able to take the whole of your pension pot as a lump sum and special tax treatment may apply.

Usually, when you reach pension age you can take 25% of your pension pot as a tax free lump sum and the remaining 75% would be taxable. However, if you are terminally ill you may be able to take all of your pension pot as a tax free lump sum, if all of the following apply to you:

  • You are expected to live for less than a year due to ill health
  • You’re under 75 years of age
  • Your pension pot does not exceed the lifetime allowance amount of £1 million

The rules on special tax treatments will depend on the rules of your scheme, it is advisable to seek independent pension advice to clarify what your entitlements are and ensure you are taking the best course of action if you are considering taking an ill health pension.

If you are looking for independent pension advice in Manchester, we can help you find the right pension adviser to help you with all aspects of ill health pensions to ensure you have the most effective and efficient strategies in place.

Taking Ill Health Retirement

If you meet the criteria of your scheme for taking ill health retirement you may be able to take your pension benefits early. As you will be taking your pension benefits early, it is likely your pension pot will be less than expected if you had continued to work until retirement age, but if special tax treatments apply to your circumstances this could help reduce the effect on your pension amount.

Taking ill health retirement will be unavoidable and unplanned, while many will plan for their retirement not all will consider how ill health could affect their retirement or pension. Working with an independent financial adviser can help you plan for the unexpected before it is too late and they will be able to advise on the best strategies for protecting you and your family should ill health affect your circumstances.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients in Manchester to provide independent pension advice. Our financial advisers will work with you to determine how ill health retirement will affect your pension and advise on the best course of action.

At Pensionadvice.org we can help you find a FCA registered financial adviser for independent pension advice in Manchester. The financial advisers we recommend offer bespoke pension advice in Manchester that is tailored to your unique personal circumstances.

May 23
7
What Happens to your Pensions if you Leave the UK?

What Happens to your Pensions if you Leave the UK?

By | QROPS UK | No Comments

If you are planning on relocating abroad and leaving the UK, you are likely to have many questions about what happens to your UK pensions. From whether you can still claim your State Pension to whether you should transfer your UK workplace or private pension to a QROPS.

You will have worked hard to build your pension pots and it is understandable that you will want to get the most out of them in your retirement. If you are planning to move abroad permanently it could be beneficial to transfer your UK pension to a QROPS. Before making any changes to your pension plan it is advisable to seek the advice of a financial adviser that specialises in expat pension advice including UK pension transfers.

Can I Claim my UK State Pension Abroad?

If you leave the UK you will still be eligible to receive your State Pension, providing you have paid at least 10 years of National Insurance Contributions and you will need to have contributed for 30 years to receive a full pension.

However, you will only receive pension increases each year if you live in:

  • the UK for 6 months or longer each year
  • the European Economic Area (EEA)
  • Switzerland
  • a country that has a social security agreement with the UK that allows for increases

If you are planning to leave the UK there are several options available to you for your private and workplace pensions, two of the most common are leaving them where they are in the UK or transferring them to a QROPS.

Leaving your Pension in the UK

If you move abroad and leave your pension in the UK it will be held by your pension provider until you reach pension age and can start to claim it as you would in the UK. If you move abroad your pension would still be paid in Sterling, meaning that exchange rates and currency costs could mean your pension payment could be less than if you were living in the UK.

To give you a better understanding of how leaving your pension in the UK may affect you it is advisable to seek independent financial advice to ensure you are aware of costs, implications, restrictions and benefits of leaving your pension in the UK.

Transfer your UK Pension to a QROPS

If you have private pensions or workplace pensions in the UK you may be able to transfer these to a QROPS providing you meet the conditions. There are many benefits to transferring your UK pension to a QROPS, including:

  • Reduced tax liability
  • Increased flexibility of pension income
  • Greater tax efficiency
  • No currency conversion costs
  • Not affected by exchange rates

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

Find out if a QROPS UK Pension Transfer if Right for you

If you are looking for independent pension advice on whether transferring your UK pension to a QROPS could be beneficial, 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.

The financial advisers we recommend are experienced retirement planning, UK pension transfers to QROPS and regularly work with their clients to provide support and guidance on all aspects of pension advice for clients leaving the UK. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and will provide sound retirement planning advice.

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

May 18
6

Will Early Retirement Affect your Pension Pot?

By | Manchester | No Comments

Depending on the rules of your pension scheme it may be possible to take your benefits from your pension early. How this will affect your pension pot will depend on whether your pension is a defined contribution scheme or a defined benefit scheme.

One of the main ways that your pension may be affected is that your benefits could be reduced if taken early as it is likely your pension will be paid to you for a longer period of time and contributions will stop if you are no longer working.

While it may be necessary for you to retire early due to a change in your circumstances such as ill health, it is imperative you seek independent financial advice before making any changes to your pension plan to be sure you understand how it will affect your pension and your retirement income. A financial adviser will be able to work with you to ensure you are taking the best course of action.

If you are looking for independent pension advice in Manchester, 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.

Early Retirement and Defined Contribution Pension Schemes

If you are a member of a defined contribution pension scheme you will likely have the option to open your pension pot from the age of 55. In some cases, schemes are set up for special industries where early retirement is likely, that allow members to access their pension pots before the age of 55. Contacting your scheme provider or seeking an advice from an independent pension adviser will help you determine the rules on early retirement that apply to your pension scheme.

While early retirement may not always be avoidable, there are some disadvantages to opening your pension pot early, these include:

  • Your pension pot will be smaller as you will have had less time to pay into it and it will have had less time to grow
  • Your retirement income will be less as it will need to be paid for longer
  • Depending on the rules of your scheme there may be early exit fees
  • If early retirement is taken during a fall in the financial market, your pension investment may not have performed as well and may not have had time to recover from market instability

Early Retirement and Defined Benefit Pension Schemes

As with defined contribution schemes, your defined benefit pension will likely permit you to take your benefits from the age of 55 and in some cases earlier than 55, this will depend on the rules of your scheme.

Early retirement from a defined benefit pension scheme could mean that your pension income is reduced as it will have to be paid for longer and you will not have had as much time to build your pension pot. Also, your defined benefit will likely be reduced as your time as a member of the scheme will be less if you retire early and therefore your accrual rate which is used to determine your benefit will be affected.

Another important to factor to consider is your state pension, you will not be able to draw your state pension until you reach state pension age. The age at which you can draw your state pension depends on when you were born. While your state pension should not be relied upon, it can provide a top up to your personal pension plan.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients in Manchester to provide independent pension advice. Our financial advisers will work with you to determine how early retirement will affect your pension pot and advise on the best course of action.

At Pensionadvice.org we can help you find a FCA registered financial adviser for independent pension advice in Manchester. The financial advisers we recommend offer bespoke pension advice in Manchester that is tailored to your unique personal circumstances.

May 16
6
Key Questions to Ask a Financial Adviser

Key Questions to Ask a Financial Adviser

By | Chelmsford | No Comments

Planning for your retirement can be confusing and stressful, from understanding the different types of pensions, deciding which pension plan is best suited to you to knowing if you are contributing enough to your pension for a comfortable retirement. Seeking advice from an independent financial adviser can help remove the confusion and stress.

A good financial adviser will work with you to ensure you understand your options, the benefits and the potential risks and will ensure you have the most effective pension strategy in place. It is important to ensure your financial adviser is providing bespoke advice that is tailored to your personal circumstances and financial goals.

If you are looking for independent pension advice in Chelmsford 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.

Questions to Ask

Choosing the right independent financial adviser is an essential part of making your money go further and ensuring your retirement is financially comfortable. Here are a few key questions to ask them:

    • Are you approved by the Financial Conduct Authority (FCA)? It is important that you use a financial adviser that is approved by the FCA and on the FCA register.
    • What services do you offer? Asking about their services will help you determine whether they have the experience and knowledge to help you meet your goals. For example, if you are looking for pension advice, but the adviser you are speaking with doesn’t offer it as a service they are not a good match for your requirements.
    • How, and how much, do you charge clients? This is likely to be one of the first questions that comes to mind once you have decided to seek financial advice. A financial adviser must tell you how much they charge before you are taken on as a client. Although they may not be able to give you an exact quote, they will be able to give you guide to costs or at least tell you how they structure their fees.
    • Will I work solely with you, or with a team? It is important to understand how they work and the kind of relationship you can expect to ensure they are a good fit.
    • How do you deal with someone who has more than one financial objective? An experienced adviser will listen to a client and help them to assess and define their key financial goals. They will be able to provide a tailored strategy that stands the best chance of achieving the targets once they have been established.
    • How regularly will you assess my financial situation and provide a progress summary? It is imperative to review your pension plan to ensure it is performing well and to review other options which may be available.
    • What will the first meeting involve? Asking about your first meeting will give you a good insight into your adviser’s approach and will help you understand how they work and what you can expect.
    • What should I prepare? Knowing what to prepare for your first meeting will ensure you are armed with the information needed and will help you get the most from your initial meeting.

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 in Chelmsford and across Essex. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and will provide sound retirement planning advice.

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

May 11
4
State Pension Triple Lock

What is the State Pension Triple Lock?

By | Lincolnshire, State Pensions | No Comments

In recent weeks you may have seen a lot in the news about the State Pension triple lock guarantee, but what exactly is the triple lock and what does the future hold for the guarantee? The State Pension triple lock was introduced in 2010 by the coalition government to guarantee that the basic State Pension would increase each year by either:

  • Price inflation
  • Average earnings
  • 2.5%

Whichever is the highest of these three factors determines how much pensioners will receive in their annual rise. The guarantee was introduced to help bring pensioner income in line with wages. While this has been beneficial to pensioners, the UK State Pension is still one of the lowest in Europe. At its fullest amount the New State Pension is £159.55, which while an improvement on the basic State Pension which is currently £122.30, it is unlikely to be enough to rely on in your retirement.

If you are at the earlier stages of planning for your retirement 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 and even if it is still in existence when you reach retirement age, it will likely not be enough for a comfortable life in your later years.

The Future of the Triple Lock Guarantee

While Prime Minister, Theresa May had confirmed that the triple lock will remain until at least 2020, the upcoming snap election could alter those plans and see the guarantee running for longer or being scrapped in favour of a double lock guarantee.

A double lock guarantee would see the State Pension rise year on year in line with either price inflation or average earnings, whichever is highest. Scrapping the 2.5% increase element of the triple lock would be a more cost effective solution for the government.

While the future of the triple lock guarantee is currently unknown and will likely become clearer in the coming months, for now and possibly the next three years at least, the State Pension will continue to increase by at least 2.5% each year.

Pension Planning Advice

If you are looking for independent pension advice in Lincolnshire 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.

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 in Lincolnshire and across the East Midlands. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and will provide sound retirement planning advice.

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

May 04
4
Transferring a Final Salary Pension

The Pros and Cons of Transferring a Final Salary Pension

By | Essex, Final Salary Pensions | No Comments

If you have a final salary pension scheme you be considering whether you should transfer it, there are pros and cons for transferring your final salary pension. It is advisable to seek independent financial advice before making any changes. Getting financial advice will ensure you are making an informed decision and making the best decision based on your circumstances and financial goals.

If you would like to speak to an independent financial adviser about your final salary pension and whether it would be beneficial for you to transfer it, we can help you find pension advice in Essex. All the financial advisers we recommend are experienced in all aspects of pension advice and are approved by the FCA.

Benefits of a Final Salary Pension

Remaining in your final salary pension scheme can offer many benefits, including:

  • Your pension pot is based on your final salary and does not rely on the performance of the stock market.
  • Your pension will rise in line with inflation.
  • Your spouse or civil partner will usually be eligible for a spouse pension if you die, although this may not be the full amount of your pension.

Pros of a Final Salary Pension Transfer

The reasons for you considering a final salary pension transfer will be personal to you and your financial goals and seeking independent financial advice can help you determine whether it is right for you. Here are some of the pros for a final salary pension:

  • Greater flexibility – after you have transferred your pension you can withdraw money from it whenever you want to, you no longer have to take your pension pot as a regular income.
  • More tax-free cash – this will depend on the type of transfer, but you may be able to take a larger amount than the current 25% as a tax free lump sum.
  • Leave money to your family after you die – while your spouse or civil partner may get a spouse pension when you die. If you transfer your pension, you can leave the money from your pension to leave to family as inheritance.
  • Poor health – if you are in poor health a final salary pension transfer could give you a larger sum of money. When you transfer your pension the amount you can transfer is based on how long the average person will live and does not take into account the status of your health.
  • Remove risk of employer going bust – although your final salary pension would be protected by the Pension Protection Fund if your employer went out of business. It is not guaranteed to pay your full pension and is more likely to pay a percentage.

Cons of a Final Salary Pension Transfer

Just as there are pros of a final salary pension, there are also cons. It is imperative that you seek independent financial advice before making any changes to your pensions to ensure you have the most effective strategy in place. The cons of a final salary pension transfer include:

  • Could be risky – a final salary pension provides a guaranteed income for the rest of your life, if you transfer your pension you could risk running out of money in your retirement.
  • No inflation protection – without a final salary pension which rises in line with inflation, you could risk having less income in your retirement.
  • Become reliant on investments – if you transfer your pensions you may increase your level of risk if invested on the stock market to provide an income for your retirement.

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 in Essex. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and will provide sound retirement planning advice.

At Pensionadvice.org we can help you find a FCA 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.