pensions and retirement

From stopping work altogether to a slow and gradual reduction of commitments - retirement means different things to different people. Making sure you can sustain the level of income you need as you move away from full-time employment or your business interests is key to a long and happy retirement.

Your pension is not the only way of building a wealth to support you in later years, other savings and assets, including ISAs or property can also form part of your financial preparation. Pensions still offer favourable tax status, and there are now more ways than ever to generate income from pension assets when you retire.

From buying an annuity to taking a lump sum or making regular withdrawals while continuing to invest - While rule changes in recent years have increased the flexibility of pensions; they have also increased the complexity.

How much do you need to save for retirement?

Understanding how much it will take to provide an income for yourself and potentially a spouse, while also ensuring you are able to leave something behind for your loved ones after your death is key. Inevitably this depends on a range of factors: primarily how much income you think you will need over the course of your retirement (one which is likely to be much longer than previous generations); and when you want to start winding down your professional life.

We can analyse your pensions, savings, investments and property holdings, and work through a range of scenarios to help you make informed decisions based on a real understanding of your options. The greatest risk to your retirement dream is doing nothing and missing opportunities. Or acting recklessly and exposing yourself to unnecessary risk by over-relying on a single asset such as property.

Building your retirement fund

Often, pensions consist of several different pension:

  • company defined benefit schemes (also known as final salary);
  • company or personal defined contribution schemes, including self-invested personal pensions (SIPPs); and
  • Stakeholder pensions and personal pensions.

You may also be looking to other savings vehicles such as individual savings accounts (ISAs), other investment, or assets such as property to provide retirement income.

There are also a number of generous tax allowances available to help you build value in your pot. These include not just the allowances on pensions but tax-efficient investments and the new exemptions on savings interest and dividend income. They are attractive, but have strict limits that are prone to change; we can help you to navigate this complex area compliantly and efficiently.

We know that calculating how much income you will be able to take in retirement without running out of savings can be hard. That is why we have developed a range of tools to analyse and illustrate your options allowing you to clearly establish where you are now, where you want to get to, and how on course you are.

Your options at retirement

What level of reliable, stable income can I realistically expect my savings and investments to produce?” is a vital question. The answer very much depends on a range of unique factors personal to you. At the time you are ready to retire, we can help you analyse all your assets, and find the most tax-efficient way to fund the retirement that you want, utilising all your money, not just your pension.

The new freedoms now afforded to pensions mean that buying an annuity on retirement is no longer compulsory. This is generally regarded as good news. But annuities still have their place in many peoples’ retirement planning alongside ‘drawdown’ and the host of other alternative options now available. These include the ability to take the whole of your pension pot as cash, and a potential tax saving if you pass on pension benefits to family members when you die.

But withdrawing cash from your pension pot too quickly or at all does create risks and even if not all your retirement assets are in a formal pension, managing them to provide for you and your family during retirement can be a complex task. It presents a host of decisions about what assets to sell, in what order, how much cash to hold as a buffer against unexpected needs and investment market turbulence, how to balance regular income and intermittent capital needs. With new flexibilities, comes more complexity - we can help you navigate the options available to you.