Pensions

Our specialist area is ‘Planning for Retirement’. We help our customers establish realistic long term goals. Its important that you make use of all the ‘tax breaks’ available to ensure that you do not have to rely on the state for retirement or better still have the option to retire early. We tie this in with our investment strategy and cash flow modelling to help those actually retired to live the best life they can with the resources available. This can also be combined with ensuring the next generation get the inheritance you planned for.

What can you do with your pension pot?

There are 6 ways you can take your defined contribution pension pot. You can usually take 25% of your pot tax free. You don’t have to start taking money from your pension when you reach your selected retirement age (the age you agreed with your provider to retire). You could leave the money invested e.g. while you’re working. The money in your pot could grow, therefore you could have more more to last a shorter length of time.

You don’t pay tax while the money stays in your pot. Money you leave in your pot can be passed on tax free if you die before the age of 75.

You may be charged extra fees if you don’t start taking your money when you reach your selected retirement age – check with your provider. As with every investment the value of your pot could go up or down.

You and your employer can continue to pay into your pot but there may be restrictions. You usually pay tax if savings in your pension pots go above the annual allowance, currently at £40,000 a year.

Quick guide to pensions…

LIFETIME ANNUITY SCHEME PENSION PHASED RETIREMENT EXISTING DRAWDOWN PENSION – CAPPED FLEXI-ACCESS DRAWDOWN UFPLS
Regular and secure income for life Regular and secure income for life Part of your fund and part of your tax free cash are used in segments to provide annuity income. Tax free cash lump sum paid at outset and fund remains invested.  Income can also be selected if required.  Tax free cash lump sum paid at outset and residual fund (subject to income tax) can be accessed immediately. A lump sum is paid up to the full value of the plan.  No regular income.
Tax free cash provided at outset and fund used to purchase an annuity paid for life. Tax free cash paid at outset and fund used to provide income for life.  The balance of the fund not used for income / tax free cash remains invested with a view to providing higher future benefits. The balance of the fund not used for income remains invested with a view to providing higher future benefits. Immediate access to the entire fund to provide income with no limits. 25% Tax Free Cash the rest subject to income tax. Immediate access to as much of the fund as required. Of the amount paid out, 25% is paid free of tax with the rest subject to income tax.
Your annuity income is paid at least annually and can increase, decrease or remain level in payment. Your annuity income is paid at least annually and can increase or remain level in payment. Your starting annuity is smaller, but is supplemented by a portion of your tax-free cash sum. You can choose the income you want, and when you want it, between nil and 150% of an equivalent single life annuity. You can choose the income you want, and when you want it.  There is no regular income but you can choose when and how much of a lump sum you require.
Additional options can be selected at outset such as annual increases, spouse’s benefits or guarantees which reduce  your own income.Additional options may be offered at outset such as annual increases, spouse’s benefits or guarantees which reduce  your own income. Each year you decide how much fund to use for annuity purchase and how much tax free cash is used to supplement your income. If investments do well, you may benefit from higher future income payments, and vice versa. On death, if there is any fund remaining then it is  available to pay benefits to your beneficiaries.
As long some funds are left in the plan, if investments do well you may benefit from higher future lump sum payments.  
Once you have bought your annuity, you usually cannot change your mind or change benefits. On death there may also be the option of a capital payment less tax. Pension income paid directly by scheme. Once in payment you cannot change your mind or change the benefits.  Because you don’t commit all your funds to buy an annuity immediately, you keep your options open. On death, the remaining fund is available to pay benefits to your beneficiaries. Policyholder must advise all other ‘active’ pension plan providers that they have flexibly accessed their benefits within 91 days, or face possible HMRC fines. Policyholder must advise all other ‘active’ pension plan providers that they have flexibly accessed their benefits within 91 days, or face possible HMRC fines. 
HMRC – Claiming Back Tax Paid on a Lump Sum