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Overcoming a Shortfall in your Pension Savings

Overcoming a Shortfall in your Pension Savings

By | Essex | No Comments

When planning for your retirement it is imperative you set clear retirement income goals, without goals you cannot effectively check if your pension savings are on track. When setting your retirement income goals, you will need to consider how much income you will need to have the retirement you want. There are many factors to consider when planning your retirement income, such as:

  • Living expenses in retirement – this could include cost of living and household bills.
  • Hobbies – do you plan to take up new hobbies when you retire?
  • Travel expenses – if you plan to travel more in retirement you will need to factor this into your retirement income planning to ensure it is achievable.

Once you have clear retirement income goals outlined in your pension and retirement plan, you can use these to determine whether your pension savings are on track and identify any shortfalls in your pension savings.

Shortfalls in your pension savings can occur if you have had periods of reduced income, such as maternity leave or have had to take time off work through accident or illness or when your pension investments have not performed as well as anticipated.

The earlier you identify these shortfalls the more time you will have to react to them and adapt your pension savings plan to overcome them. This is one of the most important reasons for regularly reviewing your pension plan and without regular reviews a shortfall could go unnoticed until it is too late to overcome.

If you think you may have a shortfall in your pension savings or are unsure if you are on track with your retirement income goals, it is advisable to seek independent pension advice. If you are looking for pension advice in Essex, we can help you find a pension adviser to help you identify how your pension savings are performing and help you react to any shortfalls.

Our recommended financial advisers provide pension advice in Essex to work with you to review your current pension plan and determine whether you are on track with your retirement income goals. All of the financial advisers we recommend provide advice that is tailored to your unique circumstances.

Actions to consider if you have a shortfall in your pension savings

If you have identified a shortfall in your pension savings there are a number of actions you can consider to help overcome the shortfall. It is imperative you seek independent pension advice before making any changes to your pension plan to ensure you are taking the best course of action to overcome shortfalls in your pension savings.

Factors you may want to consider include:

  • Are you making the most of available pension schemes?
  • Have you joined your workplace pension scheme?
  • Could you boost your contributions to your workplace pension scheme?
  • Are there other personal pension schemes you could benefit from joining?

The cost of overcoming a shortfall in your projected pension income will vary depending on your age, the further away you are from retirement the longer you will have to overcome the shortfall and therefore will have more time to boost your pension savings and allow them to grow.

If you are looking for pension advice in Essex we can help you find a specialist pension adviser that can provide advice on all aspects of pension planning, from pension planning strategies to reviewing and updating pension plans to ensure they are on track with your retirement goals.

Seeking pension advice will help you to gain a clearer understanding of the different options available to you and ensure that you have the most effective retirement planning strategies in place for your personal circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for independent pension advice in Essex. The financial advisers we recommend offer bespoke pension advice in Essex on all aspects of pension and retirement planning.

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.

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.

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.

When Should You Start a Pension?

When Should You Start a Pension?

By | Chelmsford, Essex | No Comments

It is good practice to start paying into a pension as soon as you begin working in full time employment and start earning to ensure you have the maximum amount of time to build your pension pot. The introduction of the auto-enrolment pensions has helped younger people to start thinking about pensions at a younger age and is making us more aware of our retirement years and is helping to encourage retirement planning.

Starting a pension younger will not only provide you with a more comfortable income in your retirement years, it could also open up the possibility of being able to take early retirement. Whereas people who do not start a pension until later in life, may not have sufficient time to build a significant pension pot and could risk not being able to retire until much later in life.

If you want to start building your pension pot but are unsure of or have questions about the different types of pensions and which one is the best one for you, we recommend seeking advice from an independent financial adviser to ensure you are making a wise choice and one that will be beneficial for you in later life.

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 plan for your future and provide a good level of income for your retirement.

Is It Ever Too Late to Start a Pension?

It is important to start your saving into your pension pot as early as possible, although retirement may seem a long way away and you may qualify for the State Pension – it is not guaranteed that the State Pension rules will be the same as now in 20 years’ time and in many cases the State Pension does not provide an adequate income to live comfortably.

That said, if you have left it until later in life to start your pension pot all is not lost. While you will have less time to build your pension pot, you could still manage to build a sufficient amount to provide you with an adequate income in retirement and depending on your pension scheme you may be able to increase your contributions to boost your pot.

It is always best to seeking independent financial advice before making any decisions about your pension to ensure you are making an informed decision that is appropriate for your personal circumstances and one that meets your financial objectives.

While a pension is a great way to secure financial security for your future, it is imperative that you do not overstretch your finances. A financial adviser can work with you to determine how much you can comfortably afford to contribute to your pension pot to ensure you are left with enough money to live a comfortable life and also maintain a rainy day fund for emergency financial situations.

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.

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