Pensions unlocked
Last year, the Chancellor of the Exchequer unlocked pensions, giving you more choice than ever before about what you want to do with your pension fund.
More choice is a good thing, but it can complicate matters. If you’re thinking about retiring shortly or want to plan ahead to use the new pension freedom, it’s defi nitely worth fi nding out more about your options now to make sure the wheels don’t come off your plans later.
Learn about your choices now From 6 April 2015, you’ve got several options to consider when you’re thinking of retiring. You’ll still be able to take up to 25% of your pension fund tax free. Then you can choose from: •
having the security of an annuity, which gives you a guaranteed income for life
• • •
taking money out of your pension fund as and when you want it – even all of it
leaving your money invested and drawing an income from it over time a mixture of these options.
You’ll likely want to make the most of the new pension freedom. However you also need to consider the possibility of running out of money and what you’d do then.
The right choice isn’t always obvious, and deciding how to fund your retirement is one of the biggest decisions you’ll ever make. Once you’ve made a decision, it’s unlikely you’ll be able to change your mind later, so it’s important to make the right choice.
Retiring in the next 12 months? If you plan to retire in the next 12 months, don’t
preparations now.
Firstly, work out exactly what pension assets you have. This means locating all your pensions and calculating how much they are worth in total. The process can take some time as most people have several pensions with diff erent companies, some of which may not have been paid into for decades.
80 delay. You need to start making
Next, review your pension benefi ciaries. These are the people who will benefi t if you die. You need to nominate a benefi ciary for all of your “defi ned contribution” (non-fi nal- salary) pensions. That’s because after April 6 any funds you have in a defi ned contribution pension can be passed on to your loved ones in a tax-effi cient way. Your benefi ciaries will be able to access your funds fl exibly, at any age, and they will be liable for tax at their “marginal” or top rate of income tax only if you live beyond the age of 75.
What Else? As ever, you have to think about the taxman too. Together, we can look at ways in which you can minimise the tax you pay with careful planning.
There are also changes to the way in which you can pass on pension funds when you die. We can talk this through too.
Get help with the biggest fi nancial decision you’ll ever make
As an Independent Financial Adviser, I can assess your fi nancial situation. I can examine your options, outline the pros and cons of each solution and help you decide the right route for you.
If you’d like to talk about your pension options, please give me a call on 01786 845599 and we’ll arrange a convenient time to meet.
Kindly provided by Darren@ Clarity Wealth Services
To advertise in thewire t. 07720 429 613 e.
the.wire@btinternet.com
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