We understand that pensions and retirement planning make up fundamental foundations of your overall financial planning and therefore, advice on your retirement planning objectives is a key element of what we do.
The legislative changes made during recent budgets introduced some of the most significant changes to the pensions landscape in recent times.
For those with money purchase pension arrangements, these changes heralded the much publicised pensions flexibility freedom, considerably altering the landscape of pensions and the way in which retirement income can be taken from a money purchase arrangement. With the new myriad of options, however, come with a number of potentially negative consequences and it is more vital than ever, in our opinion, that planning around what is often an individual’s financial largest asset is tailored to meet the need of that individual.
For those with Final Salary pension benefits, the recent changes have meant that while Final Salary benefits are still regarded as the Blue Riband pension contract, however they potentially do not meet every aspect of an individual’s overall planning objectives. If you would like to review your Final Salary scheme benefits and make a comparison to a personal arrangement we can carry out a thorough analysis of benefits to help you compare each of your options. As with all pension contracts it is key to understand what retained membership of a Final Salary pension scheme is projected to provide as a benefit in, and before retirement, to you and your family.
For high earners allowances have been repeatedly reduced over recent years, with the annual allowance of £40,000 now being significantly lowered from heady highs of £255,000. Legislation coming into force from April 2016 may see the annual allowance reduced further for those with taxable earnings in excess of £110,000 – the use of Carry Forward may become an even more important planning tool.
In addition, there is also key planning decisions to be made around the lifetime allowance, which will be reduced to £1million from April 2016 with indexation from 2018. With various protections available it is very much worth getting in touch to discuss this aspect of planning as there is still, depending on your personal circumstances, protection available up to £1.5m.
For directors, corporate clients or employed individuals, there is the consideration of auto enrolement. This regime will affect virtually all employers placing on them potentially onerous, time-consuming, and costly statutory obligations, we can also support you in this area.
As you can see from above, in our opinion, in the perspective of your overall financial planning, the importance of reviewing your pension arrangements on an annual basis has never been greater.