From 6 April 2015 you will have complete freedom to use your pension savings as you wish from the age of 55.The new pension freedoms are extensive and mean you will have far greater choice and control on how you generate an income from your pensions.
The pension reforms hinge around savers’ non-compulsion to use their pension pots to purchase an annuity, a pension option which would typically provide an income for the rest of their life.
The new pension rules are designed to offer greater flexibility and control to savers. Pension savers will be able to dip into their pension pots (as and when) to draw an income or lump sum, 25% of which will be tax-free.
The abolition of the Death Duty Tax – Under the old rules an invested pension could be passed on to family members but would attract a 55% tax charge. In some instances, from April 2015, members of defined contribution pension schemes can pass on their hard earned pensions to their families’ tax-free.
The government has proposed that from April 2015 people should have more flexibility over how they take money from their pension funds. The big change is that there will be no limit on the amount of income you can take, it is possible to take your entire fund in one go, although you should consider that this might result in you paying a large amount of tax. Essentially you should be able to withdraw your pension savings as it suits you.
Flexi Access Drawdown is the term used for Income Drawdown arrangements from April 2015 onwards. If someone has pension funds in a money purchase arrangement that doesn’t offer flexi access drawdown, they may need to arrange a transfer into a flexi-access drawdown arrangement.
Most money purchase pension schemes are not obliged to offer flexi-access drawdown so its availability will depend on individual scheme rules.
These are significant changes which are beneficial to people saving in pensions. Anyone who dies below the age of 75 who hasn’t yet started their pension, or is taking a drawdown pension, will be able to gift their residual defined contribution fund to anyone completely tax-free.
People can now build up their pension fund in the knowledge they can pass on these funds to anyone they choose without paying a tax charge
Those aged 75 and over who haven’t yet drawn their pension, or are taking a drawdown pension, will be able to pass on their remaining defined contribution fund to any beneficiary. Who will be able to draw it as a drawdown pension at their marginal rate of income tax, alternatively as a lump sum taxed at 45%
25% of your pension fund will be available to take as a tax-free cash sum.
Any other pension income would be taxed at your marginal rate of income tax.
Those opting to take out large amounts of money in tax one year may need to pay higher or additional rate tax on what they withdraw.
Rather than withdrawing your lump sum at the outset, one option would be to take the money from your fund as a series of lump sums, over numerous tax years, each of which would be 25% tax-free and the remainder taxed at your marginal rate of tax.
One of the options when it comes to what you do with your pension savings is to buy an annuity. There are a number of different types but they all pay a guaranteed, monthly, quarterly or annual sum until you die or for a fixed amount of time.
An annuity is a contract between an insurance provider and you to which the insurer agrees to pay you a secure income for life in exchange for your pension fund. Annuities are provided by insurance companies. The provider you choose confirms to pay a guaranteed regular income in exchange for your pension fund, regardless of how long you live. The regular income can be payable monthly, quarterly, half-yearly or annually.
An enhanced annuity will offer greater rates if you are with specific medical ailments or life styles that shorten life span. The level of enhancement would depend on the number and severity of lifestyle and medical ailments.
The essential reason why many people should still buy an annuity is because they are one of the few insurance products that can provide retirees with a guaranteed income for the rest of their lives.
Choosing a pension plan and retirement strategy which is right for you is one of the biggest financial decisions you can make.
Our recommended pension retirement advisors will guide you through to the best options for your individual circumstances.
- Your Advisor will highlight how your Pension can Best work for You
- The Tax Implications of accumulating and drawing your Pension
- Confirming your Pension Options When you need to Draw your Pension
- Reviewing your Existing Pensions to ensure your Goals are being Met
We ensure that your financial adviser is qualified, experienced and local to you
No-Obligation, Unbiased & Jargon Free Pension Consultation
Assurance that the option selected is suitable for your particular circumstances
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"My Pension Advisor was professional, patient, understanding and knowledgeable"Ms JP, Sutton Coldfield, West Midlands
"I was delighted with all aspects of the advice I received relating to my Pension Options"Mr AT, Birmingham, West Midlands
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We select Independent Financial Advisors with at least 10 years industry experience who provide smart, high quality expert advice.
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You may request a copy of the SPS once your advisor has been in contact.
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Every Independent Financial Advisor who provides pension and investment product advice must be qualified to a minimum standard (QCF Level 4) and have a current Statement of Professional Standing.
The Statement of Professional Standing (SPS) indicates that they have adhered to a code of industry ethics.
In order to hold a SPS, the advisor must complete at least 35 hours of professional training each year and keep up to date with changes in the industry.
A No-Frills Service: Deciding on whom to contact for advice can be an arduous task. Many websites supply you with a list of advisors to choose from and others are not upfront about the status of their advisors.
We are a little different… we select our advisors based on four core attributes:
We are a little different… we select our advisors based on four core attributes:
We help you by recommending a local, unbiased, highly qualified and experienced IFA (Independent Financial Advisor)
We ensure that your Independent Financial Advisor is regulated and registered with the Financial Conduct Authority and that each IFA holds the necessary qualifications to provide specialist Pension Advice.
Once your personal circumstances and goals are understood your IFA will provide you all available options, tailored recommendations, which includes structured guidance that outlines how to optimise your retirement income.
Your appointed IFA will help get your pension savings back on track!
Only Independent Financial Advisors have a legal obligation to give best practice advice at all times.
Selecting an appropriate product yourself requires considerable research, time and effort.
You may not be aware of many of the risks, tax implications and charges involved. A ‘DIY’ effort may result in the selection of an inappropriate product which could have lasting detrimental effects on your lifestyle and finances.
An Independent Financial Advisor will have the expertise and most up-to-date knowledge in order to identify the best options. Also, some financial products are only available if you go through an IFA
All of our Independent Financial Advisors are authorised by the Financial Conduct Authority and adhere to a code of ethics, resulting in high quality, honest and impartial advice.
Independent Financial Advisors are not affiliated to any one financial product or company. They offer totally unbiased advice based on a comparison of products and providers across the whole market.
An Independent Financial Advisor can assist with a New Pension, reviewing an Existing Pension or discussing your Options at Retirement.
Should you buy a pension product based on professional recommendations and financial advice, you can be assured that you will get a product that meets your needs and is appropriate for your particular circumstances.
Independent Financial advisors can offer advice on the full range of products and services in the market. You may be able to access a wider range of choices than would be possible to access on your own.
As each Independent Financial advisor is regulated by the Financial Conduct Authority, you will be afforded more protection if things go wrong and you had bought, based on their advice.
*You should definitely form at least part of your decision making process by seeking independent financial advice before you finalise your strategy.
Financial advisors fall into one of two categories, Independent and Restricted.
IFA's can call themselves Independent if they:
Can offer advice on the full range of products and services from the whole market.
Work on a fee only basis and are free from any bias.
Will make a fair and comprehensive appraisal of the relevant products available and only recommend the most suitable in accordance with your circumstances.
Restricted advisors are limited to:
Only recommend a limited range of products
Only recommend a limited range of product providers.
You will receive a free initial telephone consultation, during which you can discuss your financial needs, circumstances and ambitions.
Your free telephone consultation will not last more the one hour.
Your Independent Financial advisor will offer their professional opinion, convey any associated risks and outline how they can work with you to achieve your retirement goals.
You may opt for a face to face meeting in the comfort of your own home or at the offices of the IFA.
Your Independent Financial advisor will be located close to your home, should you wish to arrange a face to face meeting - either at your home or at the advisors office.
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