Perhaps now more than ever, it’s sensible to review your pension, and at Podium Financial we’re seeing an increase in clients contacting us who find themselves in one of three situations with their retirement plans following the pandemic.

1) Your retirement plans have slowed down
Your retirement date has been pushed back. You’ve decided not to retire at this time as you are unable to enjoy retirement because celebration events (such as dream holidays) are not possible.

How I can help you

• Make sure your pension plans are ready for when you do choose to retire.
• Help you navigate the complex tax rules about topping up your pension if you have excess income to save for retirement.

2) Your retirement plans have speeded up
Your retirement date has been moved forward – possibly outside of your control due to redundancy. You could be under pressure to access your pension earlier than you planned or want to.

How I can help you

• Help you understand all the different ways you can access your pension and how to make sure it lasts for as long as possible.

• Make sure you don’t pay too much in tax and avoid the mistakes people make when they do things themselves.
  
  

3) Your retirement plans are now in focus
For the first time you have found yourself wanting to know when you can retire. You are suddenly motivated to sort out your retirement plans and get them into shape.

How I can help you

• Review your current pension plans and tell you if we think that your pensions are best kept where they are.
• Shop around for the best deal and make sure you have the confidence that your retirement plans are now fighting fit.

Making informed decisions sooner rather than later could make a big difference to the quality of your retirement, and although retirement planning can be complex, Podium Financial are here to make sure that your retirement plans are as good as they can be. If your pensions can be improved, we will explain how and discuss the next steps with you.
 
We offer a completely independent advice service without restriction or bias. This means that as a fully independent financial adviser, we are able to research the whole of the market and select the most appropriate products and services to meet your needs.

A pension is a long term investment not normally accessible until age 55 (57 from April 2028). The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.

Retirement is a chance to do more of what you enjoy, whether that’s travelling, spending more time with family or taking up exciting new hobbies. You might decide to continue working for a while, possibly part time, or your priority may be to help the next generation, perhaps by contributing to education costs or providing help to get onto the property ladder.

Whatever plans you have for your retirement, the introduction of pension freedoms in April 2015, means that you now have more options than ever over how to access your pension pot. Whilst the range of options and increased flexibility has never been better, it’s become even more important to make the right decision and choose the best option for you. Make the wrong decisions and you could be spending your retirement struggling to make ends meet.

You can usually take your pension from age 55 (57 from 2028), although the longer you leave your money invested and continue to pay into it, the higher your income could be when you do eventually choose to take it.

Typically, up to 25% of your pension can be paid to you completely tax free, after which withdrawals are subject to income tax. The tax-free amount can be taken as a single lump sum or as smaller regular sums, where 25% per cent of each withdrawal is tax-free.

You no longer have to use your pension fund to buy an annuity, although many people still do, as an annuity guarantees a regular income stream for life. The amount of income you receive will depend upon a number of factors including the value of your pension, your health and the options you choose. Once set up, an annuity usually can’t be changed or cancelled, so it’s important to shop around and choose your annuity options carefully.

Alternatively, you could consider income drawdown which is one of the most flexible ways to access your pension. With this option, your fund remains invested and you’re in control of how much income you take and when to take it. Many people are attracted to drawdown as the flexibility allows them to draw an income without committing to an annuity. In addition, in the event of death, any remaining fund can be passed on to your loved ones, often tax free.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

You should also take care when drawing more than your tax-free cash amount, as this will then trigger the money purchase annual allowance. This effectively reduces the amount that can be paid into your pension with the benefit of tax relief from £40,000 to just £4,000 per year and could therefore have serious implications for your retirement plans.

Unlike an annuity, income drawdown doesn’t guarantee an income for life, so this option carries more risk that your money might run out before you do. It is also important to note that as your pension fund remains invested, you will need to give thought to an appropriate investment strategy and the level of risk that you are comfortable taking. The value of your pension funds (and any income from them) can go down as well as up. Past performance is not a reliable indicator of future performance.
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There’s clearly a lot to weigh up when considering your ideal retirement and how best to draw your pension. If you don’t feel confident with all these complex decisions, then please don’t hesitate to contact us. We can help you decide which option or combination of options will be most suitable for you and your retirement journey.

Most people are likely to have number of old pension pots scattered around and often many of these will be older, less flexible, and with high fees. With rising average life expectancy, the increasing state pension age and the move away from gold plated final salary schemes, it’s important to make sure that these plans are working for you. The smallest change can make a huge difference to your income in retirement.

Typically, there are five main reasons people would want to consider consolidating their pensions in one place – simplicity, lower charges, better service, more flexibility, and wider investment choice.

Transferring your pension pots and consolidating them all under one roof in a modern contract not only means that you can keep track of and monitor your pension savings more easily, but potentially you could also benefit from lower charges.

A high proportion of older, less flexible plans may now be closed to new business, which means that providers are very unlikely to want to invest in improvements to either their service or their offering.

Modern contracts are also likely to offer more flexible withdrawal options together with a wider investment choice compared to some older contracts that may only offer limited investment options.

There are however some points to watch out for before you transfer and consolidate your benefits. The first is to check if there are any exit penalties or charges to transfer out of the old scheme as clearly this may negate any benefit in transferring.

Another issue to look at is whether you would lose any valuable guarantees or benefits on transfer. Some older schemes, for example, offer generous guaranteed annuity rates (GAR) which could typically be around twice the current annuity rate for someone in good health. Whilst this can be a hugely valuable benefit, the downside to a GAR is that people need to buy an annuity which may not suit their needs. Hence keeping a plan with a GAR may not be suitable for everyone but nonetheless shouldn’t be given up without careful consideration.

Some pension plans, where benefits were built up before 2006, may be entitled to a tax-free cash sum above the normal 25 per cent. However, in most cases, the higher tax-free cash will be lost on transfer to a new plan.

​A pension is a long-term investment not normally accessible until 55. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested.

In summary, consolidating your pensions into one modern contract is likely to be a good idea for many, but there are some situations where remaining in the older contract may be the best option.
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If you are looking for expert financial advice to help you make the most of your existing pension portfolio, please do not hesitate to contact us for an initial no obligation consultation at our cost.