Pensions are complex and the rules around them change often. A flexible approach is necessary as the Government and Regulators change their focus.
We can guide you on an ongoing pro-active way on the rules, investment considerations and benefit structures best suited to meet changing needs.
Pensions are designed to enable you to save money during your working life to provide income before or during your retirement. Benefits can currently be taken at age 55, although in limited circumstances some occupations have an earlier retirement age. Over recent years the way in which benefits can be taken has become far more flexible, albeit more complicated.
There are many different ways to save for retirement. We specialise in tailoring your pension plans to meet your needs and expectations. Below are some of the common sources of pension income to provide for your retirement.
Single Tier State Pension
The State Pension is a regular payment from the government for retired people that have reached State Pension Age. It is important to understand that Occupational and Personal Pension arrangements may well (and usually) have an earlier benefit age and often offer more flexibility.
Occupational Pension
This could be a salary-related scheme (referred to as defined benefit) or a money purchase scheme (usually referred to as defined contribution). Pensions deriving from salary-related schemes are usually based on years of service and salary. The benefits from a money purchase scheme are based on contributions paid in and how well the investments in the scheme perform.
Workplace Pension
These are compulsory for most employers and are also money purchase schemes, where the benefits are based on contributions paid in and performance of the underlying investments. Minimum contributions are specified in legislation and paid by both individuals and their employers.
Personal Pension
These are also money purchase schemes, where the benefits are based on contributions paid in and performance of the underlying investments. Typically contributions may be paid by both individuals and their employers.
Old-style Pension Plans
Historically, the UK pension legislation has seen many changes. Older arrangements may include superannuation schemes, retirement annuities (S226), stakeholder plans, buyout bonds (s 32), AVCs – many of which have their own benefit restrictions/structures and indeed guarantees.
Retirement Options
There are many different products that may be used at retirement to provide benefits, ranging from the traditional form of annuity that provides a guaranteed income stream to Flexi-access Drawdown which enables benefits to be varied year to year, including both pension and tax-free cash.
Given the complexity and choice individuals now have, it is important to seek independent financial advice before making any decisions.
Pensions are a long-term investment. You may get back less than you put in. Pensions can be and are subject to tax and regulatory change; therefore, the tax treatment of pension benefits can and may change in the future.