Prepare for your ideal retirement


What are pensions?

When we retire, we need finances which both support us and our standard of living and allow us to continue achieving and protecting What Matters Most.  

In the UK, most people will access a State Pension when they retire. It is important to top this up with your own pension funds to ensure you feel clear, confident, and in control of your finances when you retire. 

There are multiple types of pensions to consider. For instance, workplace pensions, pension and compensation schemes for the armed forces, veterans, and their families, and finally, the State Pension. 

What are the benefits?

Everyone’s income is taxed (over the £12,500 threshold).  

But, when you put money into your pension, it qualifies for tax relief. Thus, when we contribute our pension, the sum of money subject to Income Tax is reduced – the sum is no longer income, as it is part of your (tax free) pension pot.  

Couple go for a hike on their retirement

What are the potential risks?

Depending on which pension options you choose, the value of your pension funds can be impacted by (both positive and negative) market performance. This risk is the same for any investment. Other risks also apply to specific pension options, like SIPPs, SSAS, and flexi access drawdown.

A good financial planner will consider these risks and create your plan with them in mind.

It is important that you discuss these risks with a Certified Financial Planner.

What is retirement planning?

The first step is to establish what you want your future to look like. We create a comprehensive image of your life and financial position now, and that of your future, based on your goals, values, responsibilities, and liabilities.  

We use this information to create a Cashflow Model and establish what your pension must look like to achieve and protect What Matters Most. This is called ‘Your Number’; the amount of capital you need to achieve and sustain your ideal retirement. It helps you get a detailed understanding of what you need to do now, how you do it, and why. 

We then create your financial plan around this, helping you achieve and protect What Matters Most to you in retirement by keeping you on track and supporting you to live life to the full.  

Talk to an adviser

Questions we get asked a lot

  1. Defined Contribution – often referred to as a pension pot. Money is paid in by you and your employer (though some employers will contribute regardless of whether you do) and is invested by the pension provider. The size of your defined contribution pension when you retire is dependent on how much was paid in and how well your investments have done over time. There are multiple options to withdraw from a defined contribution pension. Speak with a Chartered Financial Planner to find out what option is best for you. 
  2. State Pension – the pension everyone in the UK can claim from the government when they reach the State Pension age. This minimum age, as well as the value of the pension, can change, so it is important to keep up with changes on Currently, the maximum amount you can get from a State Pension is £10,600.20 per year. The amount you receive is dependent on your working history and how many National Insurance contributions you have made over your time working. 
  3. Defined Benefit – sometimes referred to as a ‘final salary’ or ‘career average’ pension. This type of pension gives you a guaranteed annual pension worth a certain amount when you retire. With this type of pension, the fund’s value is dependent on your earnings, as well as how long you worked for your employer and the agreed terms of the scheme. This pension type is decreasing in popularity. 

To trace your lost pension pots, you must find out who your workplace pension providers are. Your past employers can provide this information for you. This is done by sharing your National Insurance number and contact details.  

Tracing lost pension pots can be a tiring task, but there is often a lot to be gained for finding them. Speak to a Chartered Financial Planner about the issue in more detail to reduce some of the time-burden. 

The current full state pension is £10,600.20 per year, or £203.85 a week. Though this sum is set to increase to £221.17 a week in April 2024 due to the ‘triple lock guarantee’.  

You need at least ten qualifying years of National Insurance contributions to get any State Pension. To get the full State Pension, you need 35 years (or more) of qualifying National Insurance contributions   

When you pass away, your State Pension usually stops being paid. But there are instances in which your spouse or civil partner could inherit some of your State Pension. This opportunity depends on the amount of National Insurance contributions you have both made, and when you both reach/ed State Pension age. 

If you have a defined contribution pension, the value of your pot will usually be made available to your dependents and/or beneficiaries. Depending on what your specific pension provides, this could be provided as a lump sum or as a pension. 

If you have a defined benefit pension, it will usually be paid as a pension to your spouse or partner if you die. Though, it may also be paid as a pension to your children until they leave full time education. It is important to note that the value of the pension provided to dependents is usually less than you would have received. 

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