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.