Six in ten adults living in Wales


unaware that 30 mins of physical activity most days reduces bowel cancer risk


Retirement planning is one of the most important things you will ever do, but it can be tricky if you keep tripping up on some of the jargon used by your pension provider. According to research conducted by pension advice specialists, Portafina, around nine in ten UK adults (85%) don’t understand how a pension works. So, to help those that are feeling a little perplexed by pensions, Portafina has considered some of the UK’s most common pension- related Google searches to explain what each of those terms mean.


FCA


899,500 Google searches (UK) in the last 12 months. Te FCA (Financial Conduct Authority) is the independent, regulatory body which makes sure you are protected when you use financial services in the UK. When you put your valuable investments in the hands of a regulated financial adviser, you need to know you are being given correct information, that the company functions with your best interests at heart, and they adhere to accepted regulations and codes of conduct. Te FCA is responsible to the government, and regulated companies pay fees to cover the regulator’s costs. It’s important to check that a financial adviser is regulated before following any of their advice.


Gabby Logan whose committed to fundraising challenge.


take part in the


A YouGov poll commissioned by Bowel Cancer UK and Beating Bowel Cancer reveals six in ten adults living in Wales (60%) are not aware that being physically active for 30 minutes a day at least five times a week could help to reduce the risk of bowel cancer. Every year more than 2,200 people are diagnosed with bowel cancer, it’s the fourth most common cancer in Wales. Research shows that taking part in regular physical activity, which is 150 minutes of moderate aerobic activity such as cycling or fast walking every week, can decrease your risk of bowel cancer by as much as 12 per cent. Bowel Cancer UK and Beating Bowel Cancer have published findings of their new poll to launch the charity’s latest fundraising challenge, Step up for 30, to encourage people to take up regular exercise and be more active to reduce their risk of bowel cancer. It’s really simple, just get sponsored to do 30 minutes of physical activity every day for 30 days in June. Every 30 minutes someone dies of bowel cancer in the UK. BBC Sport presenter, Gabby Logan whose dad was diagnosed with the disease and has committed to take part in the fundraising challenge, says: “I really love being active, especially the feeling after. That can be anything, from a yoga session to training in a gym, I try to mix it up to keep it interesting! I’m supporting Bowel Cancer UK and Beating Bowel Cancer’s Step up for 30 challenge as it’s a fantastic way to encourage people to be more physically active and to help to reduce their risk of bowel cancer.” Sign up to the challenge here: bowelcanceruk. org.uk/stepupfor30


ANNUITY 118,900 Google searches (UK) in the last 12 months. An annuity is an insurance product that allows you to swap your pension savings for a guaranteed regular income that will last for the rest of your life. Tis can offer security but it can also be inflexible. Once you decide to take an annuity you generally cannot reverse it or adapt it. Tere are different types of annuity available and each offers many different options that you can choose from to best suit your needs.


ASSETS 98,400 Google searches (UK) in the last 12 months. When you put money into your pension, you are doing so with lots of other people and collectively this investment is called a fund. Tese funds are made up of a collection of different assets. Some of the main types of asset are equities (shares in a company), property (ownership in buildings), bonds (companies or governments borrowing money from investors), and cash which adds flexibility to the investment portfolio.


FINAL SALARY PENSION 45,000 Google searches (UK) in the last 12 months. A final salary pension scheme, also known as a defined benefit pension scheme (DB), is an employer scheme that promises to pay out a specific guaranteed income when you retire, based on how much you earn and how long you have worked for your employer. Unlike defined contribution (DC) pensions, (see below) the amount you’ll get at retirement is guaranteed and it will be paid directly to you.


DRAWDOWN 28,500 Google searches (UK) in the last 12 months. Drawdown is a way to take an income from your pension pot while the rest of your fund continues to be invested. You can do this from the age of 55, and are normally allowed to take up to 25% of your pot tax-free. As your pension money is still invested, there is an opportunity for your pot to grow and also a risk of it falling in value. Unlike an annuity, your income is not guaranteed, but it is flexible.


DEFINED CONTRIBUTION PENSION 18,500 Google searches (UK) in the last 12 months. Tese pension schemes are also sometimes called ‘money purchase’ schemes and they can be workplace pensions


14 - Friday 27th April 2018 - Cardiff & South Wales Advertiser


STRUGGLING TO UNDERSTAND YOUR PENSION?


arranged by your employer or private pensions arranged by you. Te amount you’ll get when you take your pension pot depends on how much was paid in, how well the investments have done and how you decide to take the pot, for example as regular payments, a lump sum or smaller sums. Most private pensions and an increasing number of company pensions are defined contribution schemes.


ANNUAL ALLOWANCE 16,700 Google searches (UK) in the last 12 months. Te annual allowance is a limit to the total amount of contributions that can be paid to a defined contribution pension (or the total amount of benefits that you can build up in a final salary scheme) in a given year, for tax relief purposes. For the 2018/19 tax year, the annual allowance is capped at £40,000, including any tax relief that you receive from your payments in addition to payments from your employer or anyone else.


AUTOMATIC-ENROLMENT 15,060 Google searches (UK) in the last 12 months. Te government introduced auto-enrolment in 2012 to encourage everyone to save for their retirement. Auto- enrolment makes it mandatory for all employers to opt-in eligible employees into a workplace pension when they start work. Both you and your employer contribute a minimum amount. From 6 April 2018 to 5 April 2019, the total combined minimum contribution is 5%. Employees have the option to opt-out of


the company pension


scheme if they wish, although we wouldn’t recommend they do.


PENSION RELEASE 8,180 Google searches (UK) in the last 12 months. Pension release means taking the 25% tax-free cash element of your pension under the pension freedoms, without immediately taking a regular income. Te remaining 75% remains invested in order to provide a retirement income in the future. As with any major decision around your pension, you should take regulated financial advice before dipping into your pension pot early.


DEATH BENEFITS 7,510 Google searches (UK) in the last 12 months. If you die before the age of 75, typically your personal pension fund can be paid as a tax-free lump sum to any beneficiary/beneficiaries of your choice. If you die after 75, your personal pension can still be paid to your beneficiary as a lump sum, but at the beneficiary’s marginal rate of income tax. Death benefits vary from scheme to scheme, so it’s always best to check which death benefits are included in your pension. Tis is especially true when it comes to final salary pension schemes, where you will almost certainly have limited options and flexibility if any when it comes to leaving your pension as a legacy.


Considering the above, Jamie Smith-Tompson, managing director at pension advice specialists, Portafina, says: “Car manufacturers rarely try and sell their cars using highly technical terms about how engines work as it wouldn’t do much for their customers who just want the facts. Instead, they focus on the benefits: performance, speed, efficiency, cost-effectiveness and the like. So, why does the pension industry still think people want jargon-filled technical descriptions when it comes to one of the most important financial vehicles they’ll ever have? It’s beyond me. We seem to be slowly turning a corner and the sooner the whole pension industry is explained with clearer terminology, the better. People should be able to approach retirement confidently without any confusion.”


For more information visit: https://www.portafina.co.uk/blog/pensions-your-jargon-buster www.cardiffandsouthwalesadvertiser.com


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