Showing posts with label Retirement. Show all posts
Showing posts with label Retirement. Show all posts
Thursday, 12 November 2015
Monday, 23 March 2015
Maximising the value of your pension pot
Probably the single most important decision to realise your long-term goals
Retirement planning involves thinking about your plans for the future now – that means investing your money with the aim of maximising its value ready for when you retire. Careful retirement planning, the right mix of assets and starting sooner rather than later will help lead to the retirement you are looking for.
Historically, for many people, the traditional view of saving for retirement was to simply put your money into a pension, with few decisions to make in the run-up to your retirement date and no choice over how the pension was taken.
Reviewing your retirement planning
Having a pension today is recognised as just one important step along the path to achieving your dreams once you have stopped working. Now, not only must you carefully consider where you actually invest your pension money and how you are going to use your pension, but if appropriate you should also review other forms of retirement savings. Reviewing your retirement planning is critical and probably the single most important decision you can make to help you realise your long-term goals.
Different investment choices produce different results. It’s essential that you contact us to review all your retirement investments to make sure they are heading in the right direction. If your circumstances change, some investments may no longer be appropriate. It’s important to get these things right, as you will be relying on the provisions you make now to generate income after you retire.
Factors that will determine your strategy
When building or reviewing your pension portfolio, there are a number of factors that will determine your strategy, including the level of risk you are willing to take. This is likely to change throughout your life, which means your investment strategy will also need to change. Receiving professional financial advice plays a vital role in helping to make sure that your pension holdings match your risk profile and your investment goals.
Typically, people in the early years of the term of their pension may feel they have time to take more risks with their investments, to increase the potential for higher returns. As they approach retirement and the duration of the investment is shorter, they may prefer, more predictably, to start to plan for their future after work. Alternatively, if they have reached their pension age and are still investing part of their fund while drawing benefits, they may prefer to keep an element of greater risk in return for higher potential growth.
When it comes to retirement planning
Your 40s is ‘the golden decade’ when it comes to retirement planning. This is when you should be putting as much as possible into your pension to give your contributions time to grow.
In your 50s, you may want to start making decisions about your retirement. If you are going to convert all of your retirement funds into income the moment you retire, you may wish to start reducing risk now. If you expect to keep it mainly invested, you may wish to keep a good weighting in investments based on shares. After all, with the growing trend towards taking work in retirement, many people may feel they can afford to keep their pension invested for longer while drawing an income.
Delaying the start of your retirement provision will have an obvious impact on the potential growth of your pension. Not only will the time period for growth potential be reduced, but you could also be passing up the opportunity for valuable tax relief.
Streamlined pension regime
Pensions have always provided a highly tax-efficient environment for long-term retirement investments. However, in April 2006, a streamlined pension regime introduced a number of extra benefits, including the potential to contribute larger sums into your pension fund when the timing is right for you.
Lifetime Allowance
Since the rules were simplified, pensions have become easier to navigate. Whether you have occupational pensions, personal pensions or both, you now have one overall annual and one Lifetime Allowance for pension savings. You can save as much as you like towards your pension, but there is a limit on the amount of tax relief you can get. The Lifetime Allowance is the maximum amount of pension saving you can build up over your life that will benefit from tax relief. If you build up pension savings worth more than the Lifetime Allowance, you’ll pay a tax charge on the excess.
If you’re in a defined benefit scheme and you take your pension after 6 April 2014, your pension benefits will be tested against the Lifetime Allowance of £1.25 million. This level of pension saving is broadly equivalent to an annual pension of £62,500 if you don’t take a lump sum, or £46,875 if you take the 25% maximum tax free lump sum (Source: HM Revenue & Customs).
For a money purchase scheme, it‘s the value of your pension pot that is used to pay your pension benefits (such as an annuity and a tax-free lump sum) that is tested against the Lifetime Allowance at the time you take your benefits. The charge is paid on any excess over the Lifetime Allowance limit. The rate depends on how this excess is paid to you. If the amount over the Lifetime Allowance is paid as a lump sum, the rate is 55%, and if it is paid as pension, the rate is 25%.
Consolidating funds
Another feature of pensions is that you can consolidate payments from one UK registered pension scheme to another. This could be either to access different benefit options or simply to consolidate your funds in one place. It is important to note that there are costs involved, and obtaining professional financial advice is essential to ensure that you take the appropriate course of action for your specific situation.
If you have more than one pension plan in your name, there could be a number of advantages to consolidating all your plans into one. Having one pension can make it much easier for you to keep track of funds, monitor performance and change strategy if necessary. Consolidation may also cut down on paperwork and could make estate planning simpler.
Again, it’s possible that consolidating pension funds may not be beneficial for your particular circumstances. You should always receive professional financial advice before deciding if it is the right course of action for you.
Post-retirement
The array of post-retirement options is vast and will need to be considered carefully, especially in the light of the proposed changes announced in Budget 2014 to fundamentally redesign the UK private pensions system. The best option for you will depend on factors such as the size of your fund, your ongoing involvement, the risk you are willing to take and the level of benefit flexibility you want.
Annuities have long been the mainstay of turning your retirement pot into income. When it comes to buying a pension annuity, you can choose from any provider in the market, with the option of inflation-proofing it or buying a guarantee so that it continues to pay out for a set period of time. You might also want an income to continue for your spouse after your death. All these options will reduce the amount you initially receive.
Currently you have other options besides buying an annuity, such as using a drawdown facility and leaving your pension invested but receiving an income from the fund. If you do this, you can still take your 25% tax-free lump sum out of your pension.
There are many choices to make during the pre and post-retirement years. However, these choices are some of the most important you will ever make, so careful consideration is essential in order to safeguard your financial future and give you the retirement you are dreaming of.
Professional financial advice you can trust
When it comes to planning for your retirement, time is your friend. The earlier you start, the longer your money has the potential to grow. But retirement planning isn’t just paying money into your pension each month and forgetting about it – you need to be proactive. To review your current situation or requirements, please contact us for more information.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Retirement planning involves thinking about your plans for the future now – that means investing your money with the aim of maximising its value ready for when you retire. Careful retirement planning, the right mix of assets and starting sooner rather than later will help lead to the retirement you are looking for.
Historically, for many people, the traditional view of saving for retirement was to simply put your money into a pension, with few decisions to make in the run-up to your retirement date and no choice over how the pension was taken.
Reviewing your retirement planning
Having a pension today is recognised as just one important step along the path to achieving your dreams once you have stopped working. Now, not only must you carefully consider where you actually invest your pension money and how you are going to use your pension, but if appropriate you should also review other forms of retirement savings. Reviewing your retirement planning is critical and probably the single most important decision you can make to help you realise your long-term goals.
Different investment choices produce different results. It’s essential that you contact us to review all your retirement investments to make sure they are heading in the right direction. If your circumstances change, some investments may no longer be appropriate. It’s important to get these things right, as you will be relying on the provisions you make now to generate income after you retire.
Factors that will determine your strategy
When building or reviewing your pension portfolio, there are a number of factors that will determine your strategy, including the level of risk you are willing to take. This is likely to change throughout your life, which means your investment strategy will also need to change. Receiving professional financial advice plays a vital role in helping to make sure that your pension holdings match your risk profile and your investment goals.
Typically, people in the early years of the term of their pension may feel they have time to take more risks with their investments, to increase the potential for higher returns. As they approach retirement and the duration of the investment is shorter, they may prefer, more predictably, to start to plan for their future after work. Alternatively, if they have reached their pension age and are still investing part of their fund while drawing benefits, they may prefer to keep an element of greater risk in return for higher potential growth.
When it comes to retirement planning
Your 40s is ‘the golden decade’ when it comes to retirement planning. This is when you should be putting as much as possible into your pension to give your contributions time to grow.
In your 50s, you may want to start making decisions about your retirement. If you are going to convert all of your retirement funds into income the moment you retire, you may wish to start reducing risk now. If you expect to keep it mainly invested, you may wish to keep a good weighting in investments based on shares. After all, with the growing trend towards taking work in retirement, many people may feel they can afford to keep their pension invested for longer while drawing an income.
Delaying the start of your retirement provision will have an obvious impact on the potential growth of your pension. Not only will the time period for growth potential be reduced, but you could also be passing up the opportunity for valuable tax relief.
Streamlined pension regime
Pensions have always provided a highly tax-efficient environment for long-term retirement investments. However, in April 2006, a streamlined pension regime introduced a number of extra benefits, including the potential to contribute larger sums into your pension fund when the timing is right for you.
Lifetime Allowance
Since the rules were simplified, pensions have become easier to navigate. Whether you have occupational pensions, personal pensions or both, you now have one overall annual and one Lifetime Allowance for pension savings. You can save as much as you like towards your pension, but there is a limit on the amount of tax relief you can get. The Lifetime Allowance is the maximum amount of pension saving you can build up over your life that will benefit from tax relief. If you build up pension savings worth more than the Lifetime Allowance, you’ll pay a tax charge on the excess.
If you’re in a defined benefit scheme and you take your pension after 6 April 2014, your pension benefits will be tested against the Lifetime Allowance of £1.25 million. This level of pension saving is broadly equivalent to an annual pension of £62,500 if you don’t take a lump sum, or £46,875 if you take the 25% maximum tax free lump sum (Source: HM Revenue & Customs).
For a money purchase scheme, it‘s the value of your pension pot that is used to pay your pension benefits (such as an annuity and a tax-free lump sum) that is tested against the Lifetime Allowance at the time you take your benefits. The charge is paid on any excess over the Lifetime Allowance limit. The rate depends on how this excess is paid to you. If the amount over the Lifetime Allowance is paid as a lump sum, the rate is 55%, and if it is paid as pension, the rate is 25%.
Consolidating funds
Another feature of pensions is that you can consolidate payments from one UK registered pension scheme to another. This could be either to access different benefit options or simply to consolidate your funds in one place. It is important to note that there are costs involved, and obtaining professional financial advice is essential to ensure that you take the appropriate course of action for your specific situation.
If you have more than one pension plan in your name, there could be a number of advantages to consolidating all your plans into one. Having one pension can make it much easier for you to keep track of funds, monitor performance and change strategy if necessary. Consolidation may also cut down on paperwork and could make estate planning simpler.
Again, it’s possible that consolidating pension funds may not be beneficial for your particular circumstances. You should always receive professional financial advice before deciding if it is the right course of action for you.
Post-retirement
The array of post-retirement options is vast and will need to be considered carefully, especially in the light of the proposed changes announced in Budget 2014 to fundamentally redesign the UK private pensions system. The best option for you will depend on factors such as the size of your fund, your ongoing involvement, the risk you are willing to take and the level of benefit flexibility you want.
Annuities have long been the mainstay of turning your retirement pot into income. When it comes to buying a pension annuity, you can choose from any provider in the market, with the option of inflation-proofing it or buying a guarantee so that it continues to pay out for a set period of time. You might also want an income to continue for your spouse after your death. All these options will reduce the amount you initially receive.
Currently you have other options besides buying an annuity, such as using a drawdown facility and leaving your pension invested but receiving an income from the fund. If you do this, you can still take your 25% tax-free lump sum out of your pension.
There are many choices to make during the pre and post-retirement years. However, these choices are some of the most important you will ever make, so careful consideration is essential in order to safeguard your financial future and give you the retirement you are dreaming of.
Professional financial advice you can trust
When it comes to planning for your retirement, time is your friend. The earlier you start, the longer your money has the potential to grow. But retirement planning isn’t just paying money into your pension each month and forgetting about it – you need to be proactive. To review your current situation or requirements, please contact us for more information.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM25
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM25
Monday, 9 March 2015
Workplace Pensions
You could soon have a pension without asking for one!
Millions of workers are being automatically enrolled into a workplace pension by their employer. A workplace pension is a way of saving for your retirement that’s arranged by your employer.
A percentage of your pay is put into the pension scheme automatically every payday.
In most cases, your employer and the Government also contribute money into the pension scheme for you. The money is used to pay you an income for the rest of your life when you start getting the pension.
You can opt out if you want to, but that means losing out on employer and government contributions – and if you stay in, you’ll have your own pension that you get when you retire.
‘Auto-enrolment’
New legal duties, from October 2012, now require employers to automatically enrol their eligible employees into a qualifying pension scheme. The reform will be ‘staged’ over a six-year period, depending on the size of the employer.
The new law means that every employer must automatically enrol workers into a workplace pension scheme who:
• Are not already in one
• Are aged between 22 and State Pension age
• Earn more than £9,440 a year
• Work in the UK
This is called ‘automatic enrolment’. You may not see any changes if you’re already in a workplace pension scheme. Your workplace pension scheme will usually carry on as normal.
But if your employer doesn’t make a contribution to your pension now, they will have to by law when they ‘automatically enrol’ every worker.
If you are an employer, you need to make sure that your business is prepared as workplace pension reform becomes applicable to you.
When it comes to making contributions, there are two main things to consider, namely:
• The level of contributions you wish to make
• The definition of pay you wish to use
Both you and your employees will be required to pay money into the pension, subject to certain minimums, as shown in the information below.
Oct 2012 to Sept 2017 – EMPLOYER: 1% EMPLOYEE 1 %
Oct 2017 to Sept 2018 – EMPLOYER: 2% EMPLOYEE 3%
Oct 2018 onwards – EMPLOYER: 3% EMPLOYEE 5%
These are only minimum amounts and you can choose to pay more than this.
You can even pay some or all of your employee’s contribution, if you wish to do so.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
Auto-enrolment affects all employers in the UK. With auto-enrolment underway, employers must now automatically enrol eligible employees into a qualifying pension scheme. Whether you are an employee or employer, we can help guide you through your pension options. To find out more, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM24
Millions of workers are being automatically enrolled into a workplace pension by their employer. A workplace pension is a way of saving for your retirement that’s arranged by your employer.
A percentage of your pay is put into the pension scheme automatically every payday.
In most cases, your employer and the Government also contribute money into the pension scheme for you. The money is used to pay you an income for the rest of your life when you start getting the pension.
You can opt out if you want to, but that means losing out on employer and government contributions – and if you stay in, you’ll have your own pension that you get when you retire.
‘Auto-enrolment’
New legal duties, from October 2012, now require employers to automatically enrol their eligible employees into a qualifying pension scheme. The reform will be ‘staged’ over a six-year period, depending on the size of the employer.
The new law means that every employer must automatically enrol workers into a workplace pension scheme who:
• Are not already in one
• Are aged between 22 and State Pension age
• Earn more than £9,440 a year
• Work in the UK
This is called ‘automatic enrolment’. You may not see any changes if you’re already in a workplace pension scheme. Your workplace pension scheme will usually carry on as normal.
But if your employer doesn’t make a contribution to your pension now, they will have to by law when they ‘automatically enrol’ every worker.
If you are an employer, you need to make sure that your business is prepared as workplace pension reform becomes applicable to you.
When it comes to making contributions, there are two main things to consider, namely:
• The level of contributions you wish to make
• The definition of pay you wish to use
Both you and your employees will be required to pay money into the pension, subject to certain minimums, as shown in the information below.
Oct 2012 to Sept 2017 – EMPLOYER: 1% EMPLOYEE 1 %
Oct 2017 to Sept 2018 – EMPLOYER: 2% EMPLOYEE 3%
Oct 2018 onwards – EMPLOYER: 3% EMPLOYEE 5%
These are only minimum amounts and you can choose to pay more than this.
You can even pay some or all of your employee’s contribution, if you wish to do so.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
Auto-enrolment affects all employers in the UK. With auto-enrolment underway, employers must now automatically enrol eligible employees into a qualifying pension scheme. Whether you are an employee or employer, we can help guide you through your pension options. To find out more, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM24
Monday, 12 January 2015
State Pension
A regular income once you reach State Pension age
The State Pension gives you a regular income once you reach State Pension age. It is based on National Insurance contributions and the amount you get depends on how much you paid in. To receive it you must have paid or been credited with National Insurance contributions.
There are different rates of State Pension. The rate you receive depends on your circumstances. The full Basic State Pension is currently £113.10 per week – under existing rules, the amount of State Pension you get depends on your National Insurance contributions, and sometimes those of your current or former spouse or registered civil partner.
Basic State Pension – what is the rate?
The following list is an overview of the maximum basic State Pension you can get.
Circumstances and Basic State Pension weekly rate for 2014/2015
Single man or woman:
£113.10
Married man, woman or registered civil partner (who qualifies with their own National Insurance Contributions):
£113.10
Married man, woman or registered civil partner (using his wife’s, her husband’s or registered civil partner’s National Insurance record):
£67.80
You may have made contributions from your earnings or have been credited with them by the Government, if you were caring for a child or disabled person.
The basic State Pension increases every year by whichever is the highest:
• Earnings – the average percentage growth in wages (in Great Britain)
• Prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
• 2.5%
You may have to pay tax on your basic State Pension.
You can top up your State Pension to £67.80 per week if:
• You expect your basic State Pension will be less than that
• You’re married or in a registered civil partnership
• You meet the qualifying rules
Additional State Pension
You might also qualify for the Additional State Pension. The Additional State Pension is sometimes also known as ‘SERPS’ or the ‘State Second Pension’ (S2P). Not everyone receives an additional State Pension. The amount you get depends on your earnings.
Additional parts of the State Pension rise in line with the increase in prices. These include:
• The State Second Pension (S2P)
• The State Earnings-Related Pension Scheme (SERPS)
• Graduated Retirement Benefit
• Extra State Pension received for putting off (deferring) your State Pension claim (also called ‘increments’)
Until you reach State Pension age, the amount of State Second Pension or SERPS you have built up will usually be increased in line with the growth in average earnings. This is also known as ‘revaluation’.
Receiving the basic State Pension
The earliest you can receive the basic State Pension is when you reach State Pension age. Your basic State Pension depends on the number of years you’ve paid National Insurance or got National Insurance credits, for example, while unemployed or claiming certain benefits.
To qualify for a basic State Pension, at least one of the following must apply:
• You were working and paying National Insurance
• You were getting certain benefits, for example, unemployment or sickness
• You were a parent or carer and claiming certain benefits or credits
• You have a spouse or registered civil partner whose National Insurance contributions cover you
• You were paying voluntary National Insurance contributions
You need 30 years’ worth of contributions or credits to get the full basic State Pension. These are your ‘qualifying years’.
If you have fewer than 30 years, your State Pension will be less than £113.10 per week, but you might be able to top up by paying voluntary National Insurance contributions.
Over 80 Pensions
The Over 80 Pension is a State Pension that is available if you are aged over 80 and have little or no State Pension.
The rate is currently £67.80 weekly in the tax year 2014/2015 if you don’t get a basic State Pension. If you’re on a reduced State Pension, the Over 80 Pension will top up your State Pension to £67.80 a week.
Pension Credit
If you are a pensioner in the current tax year 2014/2015, Pension Credit could top up your weekly income to a guaranteed minimum of:
• £148.35 if you are single
• £226.50 if you have a spouse or partner
If you are aged over 65, you may also be able to get Savings Credit up to an additional:
• £16.80 weekly if you are single
• £20.70 weekly if you have a spouse or partner
The age when you can claim Pension Credit is rising in line with the increase in State Pension age for women and the further increase to 66 for men and women.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute investment advice and should not be used as the basis of any investment decision, nor should it be treated as a recommendation for any investment. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
There are a number of rules that can influence your retirement planning. To discover how we could help you save for your retirement and achieve financial independence, please contact us for further information.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM19
The State Pension gives you a regular income once you reach State Pension age. It is based on National Insurance contributions and the amount you get depends on how much you paid in. To receive it you must have paid or been credited with National Insurance contributions.
There are different rates of State Pension. The rate you receive depends on your circumstances. The full Basic State Pension is currently £113.10 per week – under existing rules, the amount of State Pension you get depends on your National Insurance contributions, and sometimes those of your current or former spouse or registered civil partner.
Basic State Pension – what is the rate?
The following list is an overview of the maximum basic State Pension you can get.
Circumstances and Basic State Pension weekly rate for 2014/2015
Single man or woman:
£113.10
Married man, woman or registered civil partner (who qualifies with their own National Insurance Contributions):
£113.10
Married man, woman or registered civil partner (using his wife’s, her husband’s or registered civil partner’s National Insurance record):
£67.80
You may have made contributions from your earnings or have been credited with them by the Government, if you were caring for a child or disabled person.
The basic State Pension increases every year by whichever is the highest:
• Earnings – the average percentage growth in wages (in Great Britain)
• Prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
• 2.5%
You may have to pay tax on your basic State Pension.
You can top up your State Pension to £67.80 per week if:
• You expect your basic State Pension will be less than that
• You’re married or in a registered civil partnership
• You meet the qualifying rules
Additional State Pension
You might also qualify for the Additional State Pension. The Additional State Pension is sometimes also known as ‘SERPS’ or the ‘State Second Pension’ (S2P). Not everyone receives an additional State Pension. The amount you get depends on your earnings.
Additional parts of the State Pension rise in line with the increase in prices. These include:
• The State Second Pension (S2P)
• The State Earnings-Related Pension Scheme (SERPS)
• Graduated Retirement Benefit
• Extra State Pension received for putting off (deferring) your State Pension claim (also called ‘increments’)
Until you reach State Pension age, the amount of State Second Pension or SERPS you have built up will usually be increased in line with the growth in average earnings. This is also known as ‘revaluation’.
Receiving the basic State Pension
The earliest you can receive the basic State Pension is when you reach State Pension age. Your basic State Pension depends on the number of years you’ve paid National Insurance or got National Insurance credits, for example, while unemployed or claiming certain benefits.
To qualify for a basic State Pension, at least one of the following must apply:
• You were working and paying National Insurance
• You were getting certain benefits, for example, unemployment or sickness
• You were a parent or carer and claiming certain benefits or credits
• You have a spouse or registered civil partner whose National Insurance contributions cover you
• You were paying voluntary National Insurance contributions
You need 30 years’ worth of contributions or credits to get the full basic State Pension. These are your ‘qualifying years’.
If you have fewer than 30 years, your State Pension will be less than £113.10 per week, but you might be able to top up by paying voluntary National Insurance contributions.
Over 80 Pensions
The Over 80 Pension is a State Pension that is available if you are aged over 80 and have little or no State Pension.
The rate is currently £67.80 weekly in the tax year 2014/2015 if you don’t get a basic State Pension. If you’re on a reduced State Pension, the Over 80 Pension will top up your State Pension to £67.80 a week.
Pension Credit
If you are a pensioner in the current tax year 2014/2015, Pension Credit could top up your weekly income to a guaranteed minimum of:
• £148.35 if you are single
• £226.50 if you have a spouse or partner
If you are aged over 65, you may also be able to get Savings Credit up to an additional:
• £16.80 weekly if you are single
• £20.70 weekly if you have a spouse or partner
The age when you can claim Pension Credit is rising in line with the increase in State Pension age for women and the further increase to 66 for men and women.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute investment advice and should not be used as the basis of any investment decision, nor should it be treated as a recommendation for any investment. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
There are a number of rules that can influence your retirement planning. To discover how we could help you save for your retirement and achieve financial independence, please contact us for further information.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM19
Monday, 29 December 2014
Planning for the quality of life you want in your golden years
Looking forward to a secure and financially independent retirement
Saving for your retirement may not seem important when you’re starting out. But the sooner you start saving for your retirement, the more secure your future will be.
It’s so important to invest for your retirement. Putting as much as you can into a pension provision as soon as you can gives you a much better chance of having the retirement you want.
When planning your retirement, there are three main types of pension you need to consider. These are State Pensions, private personal pensions and occupational workplace pensions.
Whether you are thinking of starting a pension, reviewing your existing pension provision or are about to take benefits from a scheme, there are many issues you should discuss with us:
• At your age, how much should you be saving?
• Could you optimise your tax position for retirement by also saving in an alternative tax-efficient vehicle?
• Would bringing existing pension funds you have built up together in one place help you manage them better?
• How can you maximise your pension contributions as you reach retirement age?
• What might you expect by way of pension from the State and when will you receive it?
• What’s the best time to start taking income from your pension fund?
• What are the alternatives to buying a pension annuity and why might they be better for you?
• How can you use your tax-free cash allowance to the best advantage?
• What if you want to take your pension fund overseas?
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute investment advice and should not be used as the basis of any investment decision, nor should it be treated as a recommendation for any investment. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
The quality of life you want in your future retirement years will depend on what you contribute in the present. Planning your finances can help to ensure that you have peace of mind, so that you can look forward to a secure and financially independent retirement. To discuss how we could help you achieve this goal, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Saving for your retirement may not seem important when you’re starting out. But the sooner you start saving for your retirement, the more secure your future will be.
It’s so important to invest for your retirement. Putting as much as you can into a pension provision as soon as you can gives you a much better chance of having the retirement you want.
When planning your retirement, there are three main types of pension you need to consider. These are State Pensions, private personal pensions and occupational workplace pensions.
Whether you are thinking of starting a pension, reviewing your existing pension provision or are about to take benefits from a scheme, there are many issues you should discuss with us:
• At your age, how much should you be saving?
• Could you optimise your tax position for retirement by also saving in an alternative tax-efficient vehicle?
• Would bringing existing pension funds you have built up together in one place help you manage them better?
• How can you maximise your pension contributions as you reach retirement age?
• What might you expect by way of pension from the State and when will you receive it?
• What’s the best time to start taking income from your pension fund?
• What are the alternatives to buying a pension annuity and why might they be better for you?
• How can you use your tax-free cash allowance to the best advantage?
• What if you want to take your pension fund overseas?
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute investment advice and should not be used as the basis of any investment decision, nor should it be treated as a recommendation for any investment. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
The quality of life you want in your future retirement years will depend on what you contribute in the present. Planning your finances can help to ensure that you have peace of mind, so that you can look forward to a secure and financially independent retirement. To discuss how we could help you achieve this goal, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.18
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.18
Monday, 15 December 2014
Decisions that determine your standard of living in retirement
The choices you need to make that will determine how much income you live on once retired
Sooner or later we all retire, and the decisions you make today are the ones that will determine your standard of living in retirement. If you are approaching your retirement, there are some very important choices you need to make that will determine how much income you live on once retired.
Firstly, you’ll need to check your personal, company and State Pensions. You must make sure you have enough income to provide for your needs in the future. If you are planning on using your pension to buy an annuity when you retire, it is essential that you don’t just accept the deal offered by your pension provider, as you could potentially lose out on a significant amount of money over the lifetime of the annuity.
Exercise your Open Market Option
You should always exercise your Open Market Option that will enable you to get the best possible deal for your pension fund. Comparing the different rates available – instead of buying an annuity from the company with whom you have built up your pension savings – could result in a significant increase to your retirement income, depending on your circumstances.
You can buy your annuity from any provider and it certainly doesn’t have to be with the company you had your pension with. The amount of income you will receive from your annuity will vary between different insurance companies, so it’s essential that you receive professional financial advice before making your decision.
Don’t forget about inflation
As you are likely to spend around 20 or even 30 years in retirement, remember that inflation could have a serious impact on the purchasing power of your savings. If you have opted for an inflation-linked annuity rather than a level annuity, then you will have protection against the rising cost of living.
Work out carefully how much income you need to draw
When you retire, you don’t have to go down the route of purchasing an annuity. An alternative to purchasing an annuity is to leave your pension invested and take a portion of the pension pot each year as an income, hence the phrase ‘income drawdown’. This option may also mean that you could possibly leave your family some legacy when you die, as your pension pot, after tax of 55%, passes on to your family according to your wishes. However, if you take out too much, your capital could soon be eaten away. But the upside of not buying an annuity is that your funds remain invested with the potential for further growth.
Sooner or later we all retire, and the decisions you make today are the ones that will determine your standard of living in retirement. If you are approaching your retirement, there are some very important choices you need to make that will determine how much income you live on once retired.
Firstly, you’ll need to check your personal, company and State Pensions. You must make sure you have enough income to provide for your needs in the future. If you are planning on using your pension to buy an annuity when you retire, it is essential that you don’t just accept the deal offered by your pension provider, as you could potentially lose out on a significant amount of money over the lifetime of the annuity.
Exercise your Open Market Option
You should always exercise your Open Market Option that will enable you to get the best possible deal for your pension fund. Comparing the different rates available – instead of buying an annuity from the company with whom you have built up your pension savings – could result in a significant increase to your retirement income, depending on your circumstances.
You can buy your annuity from any provider and it certainly doesn’t have to be with the company you had your pension with. The amount of income you will receive from your annuity will vary between different insurance companies, so it’s essential that you receive professional financial advice before making your decision.
Don’t forget about inflation
As you are likely to spend around 20 or even 30 years in retirement, remember that inflation could have a serious impact on the purchasing power of your savings. If you have opted for an inflation-linked annuity rather than a level annuity, then you will have protection against the rising cost of living.
Work out carefully how much income you need to draw
When you retire, you don’t have to go down the route of purchasing an annuity. An alternative to purchasing an annuity is to leave your pension invested and take a portion of the pension pot each year as an income, hence the phrase ‘income drawdown’. This option may also mean that you could possibly leave your family some legacy when you die, as your pension pot, after tax of 55%, passes on to your family according to your wishes. However, if you take out too much, your capital could soon be eaten away. But the upside of not buying an annuity is that your funds remain invested with the potential for further growth.
Another route worth considering is flexible drawdown
To qualify for flexible drawdown, you must have a guaranteed pension income of £12,000, known as the ‘Minimum Income Requirement’. If you are eligible, then you can withdraw the rest of your pension fund in a manner that best suits your circumstances, whether that’s in its entirety or in part withdrawals. It is often sensible to make withdrawals over several years though, as you still pay income tax on any withdrawals, so the larger the withdrawal, the more tax you’ll pay.
Have you forgotten about any other pensions?
It can be easy to lose track of pensions over time, especially if you move from job to job, but you can locate a lost pension by contacting the Pension Tracing Service online at www.gov.uk/find-lost-pension. This service is free, and if they locate your pension, they’ll give you the address of your scheme provider.
This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. While annuities are generally guaranteed to be paid, remaining invested and using drawdown means that the value of your pension, and the income from it, can go down as well as up. Therefore, there is a chance that you may not get back as much as you would by using an annuity. Drawdown is a high-risk option which is not suitable for everyone. If the market moves against you, capital and income will fall. High withdrawals will also deplete the fund, leaving you short on income later in retirement. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
Not sure about your retirement options? There is a lot to think about as you approach your retirement. Contact us to discuss your retirement options and we’ll help you decide what’s right for you. We look forward to hearing from you.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice
Article Reference: PPS062014.GM15
To qualify for flexible drawdown, you must have a guaranteed pension income of £12,000, known as the ‘Minimum Income Requirement’. If you are eligible, then you can withdraw the rest of your pension fund in a manner that best suits your circumstances, whether that’s in its entirety or in part withdrawals. It is often sensible to make withdrawals over several years though, as you still pay income tax on any withdrawals, so the larger the withdrawal, the more tax you’ll pay.
Have you forgotten about any other pensions?
It can be easy to lose track of pensions over time, especially if you move from job to job, but you can locate a lost pension by contacting the Pension Tracing Service online at www.gov.uk/find-lost-pension. This service is free, and if they locate your pension, they’ll give you the address of your scheme provider.
This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. While annuities are generally guaranteed to be paid, remaining invested and using drawdown means that the value of your pension, and the income from it, can go down as well as up. Therefore, there is a chance that you may not get back as much as you would by using an annuity. Drawdown is a high-risk option which is not suitable for everyone. If the market moves against you, capital and income will fall. High withdrawals will also deplete the fund, leaving you short on income later in retirement. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
Not sure about your retirement options? There is a lot to think about as you approach your retirement. Contact us to discuss your retirement options and we’ll help you decide what’s right for you. We look forward to hearing from you.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice
Article Reference: PPS062014.GM15
Monday, 17 November 2014
How to make sure you enjoy your retirement
5 tips to improve your golden years, no matter what your current stage of life
Retirement may seem a long way off for you at the moment, but that doesn’t mean you should forget about it.
Retirement may seem a long way off for you at the moment, but that doesn’t mean you should forget about it.
1. Have you considered how much State Pension will you receive?
The State Pension is a valuable foundation on which to build your retirement income, together with any workplace or personal pension provision you have. If you work, you’re required to contribute, and if you don’t work, you might be making voluntary contributions or being credited as though you were contributing. You can log onto www.gov.uk/calculate-state-pension to get a State Pension forecast.
2. Track down your missing pension(s)
You might move jobs a number of times during your working life and pay into a number of pensions. It can be hard for you to keep track of your pensions. If you do lose track, you can visit www.gov.uk/find-lost-pension to track your lost pension or pensions.
3. Think about the ‘what if’ scenario – who inherits your pension pot?
Make sure your pension paperwork is up to date, or there could be confusion over who the beneficiary should be. This is particularly important if you’re not married and you want to safeguard your partner’s position. Most pension providers have an Expression of Wishes form where you can state a preference for who should receive your pension pot once you’re no longer here. There are typically different choices depending on the type of pension and also whether you’ve started to take an income yet.
4. How much have you saved for your retirement?
If you don’t know, what are you expecting to live on later in life? When thinking about your income in retirement, you need to consider the sort of retirement you want and how much money you’ll need. We can help you to review how much you’ve saved for retirement so far and explore your options if you’re not saving enough.
5. Relationships
Another factor is the rise in ‘silver splitters’ – those who divorce and form new relationships later in life. More relaxed attitudes to divorce among the ‘baby boomer’ generation in comparison with their parents, as well as greater financial independence among women, have been cited as possible explanations for this. We recommend that you seek legal and professional financial advice to help preserve your chances of having the retirement you want and are entitled to.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
If you’re approaching retirement, it’s time to think hard about your options. These are some of the most important decisions you’ll ever make, so let us help you. Please contact us to discuss your requirements.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice
Article Reference: PPS062014.GM13
The State Pension is a valuable foundation on which to build your retirement income, together with any workplace or personal pension provision you have. If you work, you’re required to contribute, and if you don’t work, you might be making voluntary contributions or being credited as though you were contributing. You can log onto www.gov.uk/calculate-state-pension to get a State Pension forecast.
2. Track down your missing pension(s)
You might move jobs a number of times during your working life and pay into a number of pensions. It can be hard for you to keep track of your pensions. If you do lose track, you can visit www.gov.uk/find-lost-pension to track your lost pension or pensions.
3. Think about the ‘what if’ scenario – who inherits your pension pot?
Make sure your pension paperwork is up to date, or there could be confusion over who the beneficiary should be. This is particularly important if you’re not married and you want to safeguard your partner’s position. Most pension providers have an Expression of Wishes form where you can state a preference for who should receive your pension pot once you’re no longer here. There are typically different choices depending on the type of pension and also whether you’ve started to take an income yet.
4. How much have you saved for your retirement?
If you don’t know, what are you expecting to live on later in life? When thinking about your income in retirement, you need to consider the sort of retirement you want and how much money you’ll need. We can help you to review how much you’ve saved for retirement so far and explore your options if you’re not saving enough.
5. Relationships
Another factor is the rise in ‘silver splitters’ – those who divorce and form new relationships later in life. More relaxed attitudes to divorce among the ‘baby boomer’ generation in comparison with their parents, as well as greater financial independence among women, have been cited as possible explanations for this. We recommend that you seek legal and professional financial advice to help preserve your chances of having the retirement you want and are entitled to.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
If you’re approaching retirement, it’s time to think hard about your options. These are some of the most important decisions you’ll ever make, so let us help you. Please contact us to discuss your requirements.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice
Article Reference: PPS062014.GM13
Monday, 3 November 2014
Securing a bigger annuity income
The lack of professional financial advice can be costly
You only have one opportunity to shop around for your annuity. This is called ‘exercising the open market option’. Once you have committed to an annuity provider and started to receive an income, the decision can’t be reversed. So it is essential that you shop around and obtain professional financial advice to help you through the process.
Despite the enormity of the changes announced in the 2014 Budget surrounding the lifting of restrictions on Pension benefits, there is still a continuing role for annuities, especially where you seek the peace of mind for a lifelong secure regular income.
Failure to shop around
The National Association of Pension Funds (NAPF) pointed out that the failure of someone to shop around – or being unaware they were able to do so – might reduce their annual pension income by a third.
The insurance industry has in recent years reformed its annuity practices, and insurers now have to conform to guidelines set down by the Association of British Insurers (ABI).
New guidelines will require insurers to:
• Provide clear and consistent information, including details on how to shop around for an annuity
• Highlight the details of enhanced annuities – the higher pension income available to those with shorter life expectancy
• Signpost clients to external advice and support that is available
• Give a clear picture of how their products fit into the wider annuity market
The point of retirement
Insurers have been obliged since 2002 to draw their clients’ attention to the fact that they can shop around for an annuity at the point of retirement.
One of the ways in which people may end up with too small an annuity is by not taking into account their own medical circumstances. Having conditions as seemingly manageable as high blood pressure or diabetes could qualify you for an enhanced annuity, which could pay you more income because your average life expectancy may be less.
Key points about annuities:
• Make the right decision now, because you cannot reverse it later – don’t just accept the annuity your pension provider gives you
• Shop around – it could be worth up to a third more income per month for you
• You can combine multiple pension pots into one annuity
• Common health issues, including smoking, high blood pressure and diabetes, can lead to an even higher monthly income
• Obtain professional financial advice
Lack of knowledge
Getting the best annuity rate is just the tip of the iceberg. There are many important issues which, if ignored, could have a detrimental effect on your annuity income. At present, many people who cash in their pensions simply sign up to the annuity provided by their insurer, but this is rarely the best offer.
Live better in retirement
If you are approaching your retirement, we can take you through the process step by step to find the best annuity for you. Your retirement should be a special time when you do those things you never had the opportunity to do before. So it’s essential you think and plan carefully, as the decisions you take now cannot be undone later. If you are concerned about your retirement provision, please contact us to review your current situation.
Handing over all, or part, of your pension fund
To calculate your annuity they take into account:
• Your age
• Your gender
• The size of your pension fund
• Interest rates
• Sometimes your health
Examples of health problems that might entitle you to a higher income include:
• Cancer
• Chronic asthma
• Diabetes
• Heart attack
• High blood pressure
• Kidney failure
• Multiple sclerosis
• Stroke
There are other health conditions that could also mean you receive a higher income, so if you’re on any prescription medication, we can check with your provider whether you are likely to qualify.
Other reasons for higher payments
You might also be able to receive a higher monthly retirement income if you are overweight or if you smoke regularly.
Some companies also offer higher annuity rates to people who have worked in certain jobs, such as those involving a lot of manual labour, or who live in particular areas of the country.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
Not only will different annuity providers offer different rates, they’ll also offer different annuity options. We can help you shop around to find the right type of annuity that suits you. To discuss the options available to you, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
You only have one opportunity to shop around for your annuity. This is called ‘exercising the open market option’. Once you have committed to an annuity provider and started to receive an income, the decision can’t be reversed. So it is essential that you shop around and obtain professional financial advice to help you through the process.
Despite the enormity of the changes announced in the 2014 Budget surrounding the lifting of restrictions on Pension benefits, there is still a continuing role for annuities, especially where you seek the peace of mind for a lifelong secure regular income.
Failure to shop around
The National Association of Pension Funds (NAPF) pointed out that the failure of someone to shop around – or being unaware they were able to do so – might reduce their annual pension income by a third.
The insurance industry has in recent years reformed its annuity practices, and insurers now have to conform to guidelines set down by the Association of British Insurers (ABI).
New guidelines will require insurers to:
• Provide clear and consistent information, including details on how to shop around for an annuity
• Highlight the details of enhanced annuities – the higher pension income available to those with shorter life expectancy
• Signpost clients to external advice and support that is available
• Give a clear picture of how their products fit into the wider annuity market
The point of retirement
Insurers have been obliged since 2002 to draw their clients’ attention to the fact that they can shop around for an annuity at the point of retirement.
One of the ways in which people may end up with too small an annuity is by not taking into account their own medical circumstances. Having conditions as seemingly manageable as high blood pressure or diabetes could qualify you for an enhanced annuity, which could pay you more income because your average life expectancy may be less.
Key points about annuities:
• Make the right decision now, because you cannot reverse it later – don’t just accept the annuity your pension provider gives you
• Shop around – it could be worth up to a third more income per month for you
• You can combine multiple pension pots into one annuity
• Common health issues, including smoking, high blood pressure and diabetes, can lead to an even higher monthly income
• Obtain professional financial advice
Lack of knowledge
Getting the best annuity rate is just the tip of the iceberg. There are many important issues which, if ignored, could have a detrimental effect on your annuity income. At present, many people who cash in their pensions simply sign up to the annuity provided by their insurer, but this is rarely the best offer.
Live better in retirement
If you are approaching your retirement, we can take you through the process step by step to find the best annuity for you. Your retirement should be a special time when you do those things you never had the opportunity to do before. So it’s essential you think and plan carefully, as the decisions you take now cannot be undone later. If you are concerned about your retirement provision, please contact us to review your current situation.
Handing over all, or part, of your pension fund
To calculate your annuity they take into account:
• Your age
• Your gender
• The size of your pension fund
• Interest rates
• Sometimes your health
Examples of health problems that might entitle you to a higher income include:
• Cancer
• Chronic asthma
• Diabetes
• Heart attack
• High blood pressure
• Kidney failure
• Multiple sclerosis
• Stroke
There are other health conditions that could also mean you receive a higher income, so if you’re on any prescription medication, we can check with your provider whether you are likely to qualify.
Other reasons for higher payments
You might also be able to receive a higher monthly retirement income if you are overweight or if you smoke regularly.
Some companies also offer higher annuity rates to people who have worked in certain jobs, such as those involving a lot of manual labour, or who live in particular areas of the country.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
Not only will different annuity providers offer different rates, they’ll also offer different annuity options. We can help you shop around to find the right type of annuity that suits you. To discuss the options available to you, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM12
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM12
Monday, 20 October 2014
Annuities
Deciding what to do with the pension pot you’ve built up?
If you save through a private personal pension, when you approach retirement age you’ll have to decide what to do with the pension pot you have built up. If applicable to you, one option is to buy an annuity. It’s important to find an annuity that suits you and provides the best deal because, after your property, an annuity is probably the biggest purchase you will ever make.
An annuity is the annual pension that many people buy with their private pension pots when they retire. Purchasing your annuity is an important one-off decision that has long-term consequences if you get it wrong. You may not receive the best deal if you just take the annuity offered by the insurer that has been investing your money.
A significant reform of the defined contribution pension system (as opposed to workplace final salary schemes) announced in Budget 2014 means that under the proposals, from 6 April 2015, millions of people reaching retirement age will be able to spend their pension pot in any way they want.
Given the enormity of these changes, there is still however a continuing role for annuities, especially where you seek the peace of mind for a lifelong secure regular income.
Covering a minimum level of living costs and regular outgoings – for life
An annuity provides a fixed, guaranteed income, however long you live for. As part of your retirement planning, if you favour income drawdown, you may still want to purchase an annuity to cover a minimum level of living costs and regular outgoings. It is important that you shop around for the best annuity rates to ensure that you are able to benefit from the highest retirement income available for life.
A pension annuity converts the funds built up in your pension scheme(s) into a regular income. The income is then payable for the rest of your life. So why would you still consider an annuity as part of your retirement plans?
Qualifying for an enhanced annuity
A significant number of people at retirement could qualify for an enhanced annuity. These typically offer rates from between 15% to 20% higher on average than a standard annuity if you are suffering from certain specified health or even lifestyle conditions. Examples include, smoker status, diabetes, high blood pressure or cholesterol as well as more chronic medical conditions. This could make them very attractive if you are seeking the maximum guaranteed income throughout your life.
Security and reassurance
With an annuity, the income is guaranteed, regardless of market movements, how long you live for or any changes in your circumstances. This can provide security and reassurance for you during your retirement. Unlike many other investment products, the quoted rate has no ongoing costs, fees or charges deducted. In addition, annuities are simple to understand, and do not need to be reviewed or managed on an ongoing basis. Once the annuity is set up, there is nothing more for you to do. A fixed payment is made to your bank account each and every month, for the rest of your life.
Tax matters
If you were born between 6 April 1938 and 5 April 1948, the personal allowance is currently £10,500 (2014/15 tax year). This means that in retirement, you could potentially pay less or actually no income tax. Taking your entire pension fund as a lump sum before you have considered all of your options could result in a significant tax bill. In addition, you may also potentially pay more tax than necessary on your future income.
Withdrawing the fund as cash (apart from the 25% tax-free element) could generate a tax charge. Annuities are purchased gross, so no tax is payable on the fund when it is used to buy your annuity, although the income generated may be subject to tax depending on your circumstances.
Tax is subject to change and depends on individual circumstances.
The Financial Conduct Authority does not regulate Tax Advice.
If you save through a private personal pension, when you approach retirement age you’ll have to decide what to do with the pension pot you have built up. If applicable to you, one option is to buy an annuity. It’s important to find an annuity that suits you and provides the best deal because, after your property, an annuity is probably the biggest purchase you will ever make.
An annuity is the annual pension that many people buy with their private pension pots when they retire. Purchasing your annuity is an important one-off decision that has long-term consequences if you get it wrong. You may not receive the best deal if you just take the annuity offered by the insurer that has been investing your money.
A significant reform of the defined contribution pension system (as opposed to workplace final salary schemes) announced in Budget 2014 means that under the proposals, from 6 April 2015, millions of people reaching retirement age will be able to spend their pension pot in any way they want.
Given the enormity of these changes, there is still however a continuing role for annuities, especially where you seek the peace of mind for a lifelong secure regular income.
Covering a minimum level of living costs and regular outgoings – for life
An annuity provides a fixed, guaranteed income, however long you live for. As part of your retirement planning, if you favour income drawdown, you may still want to purchase an annuity to cover a minimum level of living costs and regular outgoings. It is important that you shop around for the best annuity rates to ensure that you are able to benefit from the highest retirement income available for life.
A pension annuity converts the funds built up in your pension scheme(s) into a regular income. The income is then payable for the rest of your life. So why would you still consider an annuity as part of your retirement plans?
Qualifying for an enhanced annuity
A significant number of people at retirement could qualify for an enhanced annuity. These typically offer rates from between 15% to 20% higher on average than a standard annuity if you are suffering from certain specified health or even lifestyle conditions. Examples include, smoker status, diabetes, high blood pressure or cholesterol as well as more chronic medical conditions. This could make them very attractive if you are seeking the maximum guaranteed income throughout your life.
Security and reassurance
With an annuity, the income is guaranteed, regardless of market movements, how long you live for or any changes in your circumstances. This can provide security and reassurance for you during your retirement. Unlike many other investment products, the quoted rate has no ongoing costs, fees or charges deducted. In addition, annuities are simple to understand, and do not need to be reviewed or managed on an ongoing basis. Once the annuity is set up, there is nothing more for you to do. A fixed payment is made to your bank account each and every month, for the rest of your life.
Tax matters
If you were born between 6 April 1938 and 5 April 1948, the personal allowance is currently £10,500 (2014/15 tax year). This means that in retirement, you could potentially pay less or actually no income tax. Taking your entire pension fund as a lump sum before you have considered all of your options could result in a significant tax bill. In addition, you may also potentially pay more tax than necessary on your future income.
Withdrawing the fund as cash (apart from the 25% tax-free element) could generate a tax charge. Annuities are purchased gross, so no tax is payable on the fund when it is used to buy your annuity, although the income generated may be subject to tax depending on your circumstances.
Tax is subject to change and depends on individual circumstances.
The Financial Conduct Authority does not regulate Tax Advice.
Scheme guarantees
Regulatory capital requirements mean annuity providers have to be financially robust and well capitalised. In the unlikely event that a provider cannot meet their obligations, a Government-backed scheme guarantees to pay 90% of the amount promised.
And finally…
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is read or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
We each have our own ideas about how we want to live in retirement, and how much money we’ll need. You may be at the point of retiring or just reducing the amount of time you are at work. If so, you may also want to access the pension you have built up and convert it into an income. Setting up an annuity is easy and straightforward, enabling your income needs to be met with no need for ongoing support or advice. To find out more about annuities and the vital role they could still play in effective retirement planning, please contact us to discuss your requirements.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice
Article Reference: PPS062014.GM10
Regulatory capital requirements mean annuity providers have to be financially robust and well capitalised. In the unlikely event that a provider cannot meet their obligations, a Government-backed scheme guarantees to pay 90% of the amount promised.
And finally…
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is read or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
We each have our own ideas about how we want to live in retirement, and how much money we’ll need. You may be at the point of retiring or just reducing the amount of time you are at work. If so, you may also want to access the pension you have built up and convert it into an income. Setting up an annuity is easy and straightforward, enabling your income needs to be met with no need for ongoing support or advice. To find out more about annuities and the vital role they could still play in effective retirement planning, please contact us to discuss your requirements.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice
Article Reference: PPS062014.GM10
Friday, 10 October 2014
Professional Practice Services at London Vet Show 2014 - Stand A21
Practice Makes Perfect!
Find
out how we can help you and your practice realise your true potential. Come and
speak with the PPS Partners at London Vet Show Stand A21, Olympia Grand, 20-21
November 2014
Established in 1998, PPS now represents more
than 2,500 veterinary practices and veterinary practitioners across the UK. We take
pride in our reputation as Financial Services specialists to the Veterinary
sector and value the strong long-term relationships we forge with clients.
As proud
supporters, Professional Practice Services are back again for the two day event
in November, bringing with us a host of information and resources to help you
take back control of your financial future.
Dr
Paul Jackson, Partner, said 'PPS is the only Financial Services specialist in the UK working
exclusively for the Veterinary sector. We model ourselves on being an extension
of your business and an integral strategic partner helping you to achieve your
life goals – ultimately our success is dependent on yours.'
Visit our stand for an informal, no
obligation chat on anything financial including:
·
Retirement/Succession
Planning
·
Practice
Finance· Partnership/Share Protection
· Tax Planning
· Investment/Pension and Wealth Management
· Family Protection
· Income Protection
· Estate Planning
· Mortgages
·
Employee
Benefits
·
Workplace
Pensions & Auto-Enrolment· Business Consultancy
Alternatively
do let us know if you would like a more in depth conversation as we are
offering 1-2-1 meetings throughout the Show with Amira, David, and Paul.
Visit Stand A21 to enter our prize
draw to win a luxury hamper just in time for the festive season and as always
we'll have our ever popular fuzzy bugs and goodies to help yourself to!
Call our friendly, knowledgeable team from a
confidential, no obligation discussion:
01527 880 345
enquiries@pps-vet.co.uk
Visit our Website at:
www.pps-vet.co.uk
We'll
also be tweeting throughout the show from @ppsvet
Professional
Practice Services is authorised and regulated by the Financial
Conduct Authority.
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice
Monday, 8 September 2014
Greater choice for retirees
Proposals to fundamentally redesign the UK private pensions system
Fundamental plans proposed to redesign the UK defined contribution pension system (as opposed to workplace final salary schemes) were announced as part of the Budget 2014 speech. This is the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921, introducing new flexibility to the pensions system.
By further relaxing the rules around income withdrawals from pension funds, which will be introduced from 6 April 2015, people will have greater flexibility and choice about how they can access their money. Those who want to guarantee a regular income for life will still be able to purchase an annuity, of course.
Taking pension savings
This announcement means that people will be in a position to choose how they take their pension savings: for example, they could take all their pension savings as a lump sum, draw them down over time or buy an annuity.
The Government also intends to explore with interested parties whether those tax rules that prevent individuals aged 75 and over from claiming tax relief on their pension contributions should be amended or abolished.
Savings freedom
In the meantime, as a first step towards this reform, a number of changes have been announced to the rules. These commenced from 27 March 2014 and now allow people greater freedom and choice over accessing their defined contribution pension savings at retirement.
The changes are:
• Reducing the amount of guaranteed annual income people need in retirement to access their savings flexibly, from £20,000 to £12,000
• Increasing the amount of total pension savings that can be taken as a lump sum, from £18,000 to £30,000
• Increasing the capped drawdown withdrawal limit from 120% to 150% of an equivalent annuity income
• Increasing the maximum size of a small pension pot which can be taken as a lump sum (regardless of total pension wealth) from £2,000 to £10,000, and increasing the number of personal pots that can be taken under these rules from two to three
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
This major announcement to give retirees more choice as to how they take the income from their pension fund will mean that other options may now be given more consideration. These changes make it even more important, if you are approaching retirement, to seek professional financial advice in order to make the most of your pension pot. If you would like to find out how the changes could affect your future retirement plans, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Fundamental plans proposed to redesign the UK defined contribution pension system (as opposed to workplace final salary schemes) were announced as part of the Budget 2014 speech. This is the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921, introducing new flexibility to the pensions system.
By further relaxing the rules around income withdrawals from pension funds, which will be introduced from 6 April 2015, people will have greater flexibility and choice about how they can access their money. Those who want to guarantee a regular income for life will still be able to purchase an annuity, of course.
Taking pension savings
This announcement means that people will be in a position to choose how they take their pension savings: for example, they could take all their pension savings as a lump sum, draw them down over time or buy an annuity.
The Government also intends to explore with interested parties whether those tax rules that prevent individuals aged 75 and over from claiming tax relief on their pension contributions should be amended or abolished.
Savings freedom
In the meantime, as a first step towards this reform, a number of changes have been announced to the rules. These commenced from 27 March 2014 and now allow people greater freedom and choice over accessing their defined contribution pension savings at retirement.
The changes are:
• Reducing the amount of guaranteed annual income people need in retirement to access their savings flexibly, from £20,000 to £12,000
• Increasing the amount of total pension savings that can be taken as a lump sum, from £18,000 to £30,000
• Increasing the capped drawdown withdrawal limit from 120% to 150% of an equivalent annuity income
• Increasing the maximum size of a small pension pot which can be taken as a lump sum (regardless of total pension wealth) from £2,000 to £10,000, and increasing the number of personal pots that can be taken under these rules from two to three
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This information does not constitute advice and should not be used as the basis of any financial decision, nor should it be treated as a recommendation for any specific product. Although endeavours have been made to provide accurate and timely information, Professional Practice Services cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions.
Professional financial advice you can trust
This major announcement to give retirees more choice as to how they take the income from their pension fund will mean that other options may now be given more consideration. These changes make it even more important, if you are approaching retirement, to seek professional financial advice in order to make the most of your pension pot. If you would like to find out how the changes could affect your future retirement plans, please contact us.
Call our friendly, knowledgeable team for a confidential, no obligation discussion:
01527 880345
Visit our Website at:
www.pps-vet.co.uk
www.pps-vet.co.uk
Professional Practice Services is a Veterinary Business Consultancy and Independent Financial Advisory Firm. Professional Practice Services is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM09
The Financial Conduct Authority does not regulate finance, will writing, commercial lending, taxation or trust advice.
Article Reference: PPS062014.GM09
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