Pensions

We can advise on all types of pensions, planning for your retirement and the level of income you may require.

  • Stakeholder pensions
  • Individual Personal Pensions
  • Options at retirement
  • Transferring current or old pension plans
  • Moving old company pension schemes
  • Company/Group pension schemes
  • General Pension advice

Why have a pension?

A pension is money you'll use to live on when you retire. Most people get a State Pension but this only provides for your very basic needs and the state pension age continues to rise. For some, it’s now age 68. To make sure you have the standard of living you want in your retirement it's best to save some of what you earn now, in order to enjoy your retirement. A pension is the foundation of retirement planning.

Everyone needs money for their retirement, to support you and give you a decent standard of living. These days, people live longer so your pension will need to last you longer. This means you'll need to try and save more.

Many older people unfortunately live in poverty because they haven't been able to save enough. The help offered by the state is basic and can change over time. If your retirement is a long way off you certainly shouldn't assume that all your needs will be covered by state benefits, or that State Pension rules will be the same as now. So it's important to start putting some money away as early as you can.

How pensions work

You put aside money during your working life into a pension fund. When you reach retirement age, you get your pension to live off for the rest of your life. The amount you get will depend on how much you have saved. This is why it's important to start a pension as soon as you can. There are several ways you can save for a pension. Your employer may offer a workplace pension scheme or you can take out a personal pension through an insurance company. You may do both during your working life.

Whichever way you choose, pensions basically work like this:

  • you, and sometimes your employer, pay money into your pension on a regular basis
  • You gain tax relief (20% or 40%) on the money you put in (So for example £100 in a pension only costs you £80)
  • the money you pay in is invested so that the pot of money (fund) can grow (this is key and can have a huge impact on your total fund)
  • when you reach retirement age (anytime between age 55 and 77), you can usually take a lump sum out of your pension which is ‘tax free’ and then receive an income to live off for the rest of your life.

As well as paying into a pension scheme, you may also be paying National Insurance Contributions throughout your working life. This can build up your entitlement to the State Pension. The idea is that the income you receive from your own Pension plans could enable you to retire earlier or add to the state pension to improve your income in retirement.

Drawing an income

There are a variety of different options when it comes to drawing your pension. The options vary widely from the conventional, where you're locked into the rate of income for life; to options that allow investment for income growth and a way to potentially counteract the effects of inflation. Annuities also differ from other products where declaring health issues could actually increase the income you are eligible for. As Independent Financial adviser’s we can offer you advice and recommendations on all these areas.

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Steven Haigh BSc (Hons) APFS
IFA Partner
Positive Solutions
Independent Financial Advisers

Phone: 01484 606220
Mobile: 07802 746528
Fax: 01484 606220
E-Mail: stevenhaigh@thinkpositive.co.uk

Steven Haigh, Chartered Financial Planner, is a partner at Positive Solutions Limited, one of the UK's leading Independent Financial Advisory Firms and offers expert financial advice to both companies and individuals.