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The Importance of Planning for Retirement

Once you reach the stage where you're considering your retirement income, expert financial advice becomes even more important. Many of the choices you make at this time will affect your lifestyle so you need to make sure they're right.

A pension is a form of investment or savings plan designed to provide you with an income to live on when you retire. There are many different types of pension arrangements available, including the state pension.

Options are varied and can be tailored to your circumstances.




What is a Pension?

A pension is basically a long-term tax efficient investment. It helps you to prepare for your retirement, although you have access to it from the age of 55 whether you retire or not.

The minimum pension age will be increased from 55 to 57 in 2028.



Different types of Pensions

These often fall into the categories of defined benefit arrangements and money purchase arrangements (final salary).

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Benefits of a Pension

A pension does offer you a lot of benefits, mainly because it's a tax-efficient way to save. For UK taxpayers, every £80 you pay into your pension plan, the Government currently pays in an extra £20, making your actual contributions £100.

Accessing your Pension

Once you turn 55 (57 from 2028) you can access your pension pot. You can then leave it so it has the potential to continue to grow, or withdraw some or all of it to use as you need. When you take your pension, some will be tax-free but the rest may be taxed.

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Taking a small pension as a cash lump sum

You may be able to take the whole of your pension as cash, whether your pension is defined benefit or defined contribution. Taking cash in this way is called taking a 'trivial commutation' or 'trivial lump sum'.

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Pension Pot Choices

There are three things you can do with your pension pot once you've taken your tax-free lump sum.

You only get one chance to buy an annuity, so it's vital to get it right.

You could choose to:


You can of course do a combination of these options.

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Pension Freedom April 2015

From 6 April 2015, those with defined contribution pensions who are aged at least 55 will have the option to take a tax free-lump sum and a lifetime annuity. However some of the restrictions on a lifetime annuity will be removed to allow more choice on the type of annuity taken out.

The minimum pension age will be increased from 55 to 57 in 2028.

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Advice on taking benefits from Pension Schemes

We are experienced in providing advice on the many options available when taking benefits from pension schemes, including:

  • Annuity Purchase
  • Impaired Life/Enhanced/Smoker Rate Annuities
  • Investment Linked Annuities
  • Pension Fund Withdrawal (Drawdown)
  • Phased Retirement
  • Pension Lump Sum Investment/Portfolio Planning
  • ISA Investment
  • Income Producing Investments

The value of your investment or pension can fall as well as rise and you may not get back the original amount invested.

The levels bases and reliefs from taxation are subject to the individual circumstances of the investor, and may be subject to future change.




A PENSION IS A LONG TERM INVESTMENT THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.