MI Sup p3-6_1109.qxd 21/10/09 16:03 Page 4
4 | Gatsby Financial Solutions
Profit from
Pensions
The pensions industry is a huge business for those
involved in it. But what does it entail?
W
ith all the recent publicity to retire. Most people would agree that there is
regarding retirement plan- no such thing as ‘too much’ income in retire- Transfer
ning and proposed changes ment! Sometimes it’s in your client’s best interests to
to the retirement age, many transfer to a new provider; sometimes it isn’t.
of you must wish you were Stakeholder pensions Some reasons to consider a pension transfer
advising on pensions – all that free publicity Stakeholder pensions are a type of personal pen- w
would work wonders for your business! But you sion that the government insists meet certain circle6
ould be;
could still profit from the pensions market with- standards to ensure that they are good value. circle6
A change of employment
Poor performance with current pension
out having much work to do. Stakeholder pensions allow your clients to con-
There are three main types of non-state tribute as little as £20 per month. You don't have circle6
provider
A change in attitude to risk
p
circle6
ensions available. These are; to be working to contribute to a stakeholder pen- Transferring a personal pension is a big deci-
Occupational salary related schemes - offered sion, you also do not have to contribute every sion and should not be undertaken without
circle6
by some employers month if you can't afford to. comprehensive financial advice. However, many
Occupational defined contribution schemes Stakeholder pensions are available to everyone of us change our mortgage lenders from time to
(money purchase pensions) - offered by some and should be considered for your clients if they time to benefit from better rates and fees, so why
circle6
employers and are self-employed or employed but their employ- should the same ethos not be applied to our
Personal pensions and stakeholder pensions - er does not offer a company pension scheme. pensions?
offered by some employers or started by the They can start receiving an income from a stake-
individual. holder pension from age 50. This is changing to Qualifications
55 by 2010. They can get tax relief on their con- However, in order for you to review a client’s
Personal pensions tributions as with personal pensions, up to the pension yourself, you will need to have either full
Personal pensions are offered by most banks, annual allowance. FPC or full CeFa certificates. Not only will you
building societies and life insurance companies, need to have these qualifications, but you will
who will invest your client’s contributions on Pension problems also need the relevant permissions from your
their behalf. Your client can then start receiving If your client has a pension that they are no network if you are an AR. This will normally
an income from a personal pension from the age longer paying into, it could be losing money. mean doing some extra examinations and paying
of 50. This is increasing to age 55 by 2010. Some pensions have high charges and very little increased fees to your network.
There's no limit on the number of personal potential growth. Some will even have had no The chances are that if you don’t have these
schemes that your client can set up. Any contri- bonuses added to them for years. If nothing is qualifications then you would rarely talk to
butions they make to their pension will not affect being added, but charges are still being applied, clients about reviewing their pensions, which is a
their basic state pension entitlement. Non the fund will actually be getting smaller. missed opportunity. If a client asks you directly
income earners are also eligible to pay into a What you could do is help your client to find for assistance, you could direct them to a local
pension scheme. an alternative fund where the potential growth is IFA or make a referral to a business like Gatsby,
Your client can save as much as they like into a better and the charges are lower. A personal pen- specialising in the pension transfer market, and
pension scheme, up to 100% of their salary or sion transfer will involve transferring the funds earn money.
taxable income. They will be able to get tax relief from one pension provider to another. This The pension transfer market is one that con-
on their contributions, subject to an ‘annual means that all contributions your client has tinues to grow steadily, offering benefits to your
allowance’ above which tax will be charged. made so far can be reallocated to another pen- clients in terms of potentially improving their
The amount that they should be contributing sion company and from that point onwards they retirement savings without having to pay further
to a personal pension will depend upon certain will be making contributions to the new pension monies into a pension. It could also provide you
factors such as the amount of income they would provider. Your clients will not be asked to start with another source of income – a much needed
like to receive when they retire and how many making contributions again, unless of course one if your business has been affected by the
working years they have left until they would like they want to. credit crunch.
November 2009 Mortgage Introducer www.mortgageintroducer.com
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8