18 PENSIONS & RETIREMENT


CAN YOU TRULY


Take the first step towards a more secure retirement


At Financial Affairs, we understand that managing your wealth and securing your financial future is a complex and deeply personal endeavour. That’s why we’ve assembled a team of dedicated and trusted advisers to guide you through every step of your financial journey.


t: 01282 452255 e: alan@financialaffairs.co.uk w: financialaffairs.co.uk


DEPEND ON YOUR STATE PENSION?


By Alan Walsh Chartered financial planner, Financial Affairs


For decades, we have been hardwired to undervalue the State Pension. Perhaps you can’t do much with £221 a week. However, £11,502 a year seems like an amount worth having.


And it is. If you’re a couple receiving £23,004 per year, then you’re probably a good way towards meeting all of your essential expenditure before you even touch any private pension funds.


My message then is simple: Let’s celebrate the State Pension. But, like with lots of positive things, we also need to be careful. There are only limited circumstances in which State Pensions can be passed between spouses, and even then, the amounts are significantly reduced.


When it comes to pension planning, we should remember Denis Waitley’s famous words: “Expect the best, plan for the


worst, and prepare to be surprised.”


In retirement planning, this is achieved through Cash Flow Modelling. This financial planning tool helps you plan for a secure retirement by accounting for various potential financial challenges and life changes – for example, the early death of a spouse or needing residential care later in life.


While considering these circumstances might seem sobering, it is only by stress- testing these models until they break that you can fully understand your security in retirement. And the earlier you start engaging with these models, the more opportunity you have to ensure you are on the right track.


Take the first step towards a more secure retirement by booking a consultation with one of our financial planners today.


THE END OF


THE LIFETIME ALLOWANCE


By Tara Maynard Director, PM+M


HELPING YOUR MONEY ACHIEVE MORE


Investments Lifetime cashflow planning Business and personal protection Pensions Court of Protection advisory Tax and estate planning


Get in touch today: 01254 679131


financialplanning@pmm.co.uk www.pmm.co.uk


PM&M Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority


On April 6 2024 the lifetime allowance charge was abolished, this was the limit on the amount you could build up in pension savings without triggering a tax charge and was set at £1,073,100.


Although the abolition of the allowance will only benefit a small percentage of the population, it’s still important to understand the changes and if they could impact your retirement plans.


The lifetime allowance has been replaced by the lump sum allowance (£268,275) and the lump sum and death benefit allowance (£1,073,100) – both these allowances limit the amount of tax-free benefits that can be paid and a check is made against each of them when benefits are paid.


The changes make pensions an even more attractive way of saving


for retirement as you no longer have to worry about your pension becoming too large.


However, there is still a limit on the amount you can save into pensions each year without paying tax. This is known as the ‘annual allowance’ and is currently £60,000 or 100 per cent of your salary, whichever is lower.


It’s also important to remember that any money you save into a pension will be locked away until retirement age and if you feel you may need to access the money before then, another option such as an individual savings account (ISA) could be a better choice.


If you think any of the changes could impact your retirement plans or you would like to discuss your personal circumstances in more detail, please get in touch.


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