SIPP

Reviewing your pensions could make financial sense

It’s essential that you regularly review all your retirement plans, to make sure you know what you’ll get when you retire.

Since the implementation of the Pension Act 2015, this has led to providing various retirement options. Hence the need for pension advice has never been greater.

Pensions planning can take you a lifetime and late pension funding will be very expensive to make up the shortfall. Therefore, it makes sense to start early as contributions paid in early provide the best prospects for growth. This means that you may be able to pay in less or retire earlier than someone who starts later.

When starting out with your pension savings, the joy of actually taking the benefits may seem a long way off. For the smart ones who get underway early, it truly can be a very long time. However, as time goes on preparing for retirement will become a bigger and bigger priority. The goal posts can sometimes move or need to be moved.

For example, state pension ages are rising (moving the goal posts) and for many of us, working lifetimes are getting longer by necessity. There are also more flexible solutions presently, so retirement no longer needs to be seen as a single event in time – you may prefer to retire gradually.

There may also be occasional ‘windfalls’, such as bonuses and inheritances, these may allow a catch up to be done by injecting extra savings into your pension as lump sums.

Any additional lump sum or regular pension contribution into your pension will get the same tax allowance, so pension contribution is an excellent way to boost your retirement planning. Any tax breaks / relief into your pension contribution will fall within the limitations of the money purchase annual allowance.

Any additional pension contributions can be paid on behalf of anybody. Benefits no longer need to be exchanged for annuities at a prescriptive age as per pension freedom act.

As time goes on, affordability may change and often this relates to higher earnings out-pacing changes in outgoings, allowing more to be paid in. It is important to keep in mind that if your earnings are growing, your target retirement income may also be going up (when compared to the initial target set when you started your pension savings). It is vital that your target income is kept under review and what you pay in regularly is kept up to date.

Whether you are self-employed, an employee, a company director, business owner, partner, or even a non-earner, it is possible to take advantage of the valuable tax breaks on offer with pensions.

For all but the very highest earners (who may choose to pay in more than the generous Annual Allowance), the money you save in your pension will benefit from tax relief. This means that more goes into your pension than you pay yourself.

It’s essential that you regularly review all your retirement plans, to make sure you know what you’ll get when you retire. .

The question here is.

When was the last time your pension provision(s) was reviewed by a professional qualified adviser? Well, I can offer you a no-obligation initial meeting, so it doesn’t cost you a penny to find out if we offer the right service for you.

The following questions may help you to decide whether you should get us to review your own pension plans.

• AM I PAYING TOO MUCH IN CHARGES?
• IS THE LEVEL OF RISK IN MY PENSION FUNDS RIGHT FOR ME?
• DO MY PLANS REFLECT MY CURRENT CIRCUMSTANCES?
• AM I MAXIMISING MY TAX-EFFICIENT CONTRIBUTIONS
• DO I KNOW HOW MY PAST AND CURRENT PENSIONS ALL WORK?
• HOW IMPRESSED AM I WITH MY PROVIDER’S SERVICE?
• AM I ON TRACK FOR THE RETIREMENT INCOME I WANT?

How your pension savings are invested has a massive effect on the value of your funds. I will have guided you from the outset to match your investments to your attitude to risk and objectives. Over time these may change, e.g. when approaching retirement, many people favour reducing the risk exposure in their pension savings. This reduces the potential investment returns, but on the other hand it reduces the fund volatility meaning the value of the underlying funds is more stable, so giving more certainty in the run-up to retirement. This is just a guide and not advice

Please visit the links below:

https://www.youtube.com/watch?v=LULQkc771cE

https://www.moneyadviceservice.org.uk/en/tools/pension-calculator

https://www.gov.uk/check-state-pension