Pensions / Retirement Planning
When clients raise the issue of retirement planning, they often refer to their pension planning. Pensions are undoubtedly a popular method of planning for what is hoped to be a prosperous retirement. However, they are by no means the sole vehicle which may be utilised to fund for this.
We as financial advisers consider that various investments and allowances should be utilised in order to provide both a flexible and tax efficient income stream in retirement. The list of options available is clearly extensive, including personal and company investments. Nonetheless, pensions remain a popular medium through which to provide for retirement.
In recent years, there have been many changes to the rules applying to pensions. However, on 6th April 2006, commonly known as ‘A Day’, significant changes to the legislation brought about what is referred to as 'Pension Simplification'. As a consequence, there have been major changes in regards to limitations to funding, the evolution of products available to fund for your retirement, including the increasing popularity of Self-Invested Personal Pensions (SIPPs), and the options to facilitate taking income in retirement.
Given the changes in the pensions market, a key part of our work for clients in this area is the review of existing arrangements. This involves reviewing how transitional rules apply, fund performance and options, charges and of course whether existing funding levels are likely to satisfy your retirement objectives. It is imperative that one does not assume that existing provision continues to be effective in one or all of these areas.
Whilst the terminology ‘simplification’ may seem to suggest that this is an area which does not require advice, it remains a complex area upon which professional independent financial advice is strongly recommended.
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