Pension Planning Help Guides

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Pension Planning Help Guides

We have put together a few help guides that explain various parts of Pension Planning including allowances and schemes, these guides should only be used as a reference and are solely for information purposes only. We have tried to make them as accurate as possible based on our understanding of current regulations and tax allowances. However Adviser Index always recommends seeking advice from professionals such as Financial Advisers, Solicitors and Accountants for advice on personal circumstances.

What is Pension Planning?

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. The state will help but you will need to make your own plans to make sure you are comfortable when you retire in the future.

The sooner you start putting money into your own personal or company pension, the more time you have for it to build up. You might choose to take out your own personal or company pension because:

you may get money back in tax relief
you may get additional contributions from your employer
you can lock your money away until you retire

Once you have a pension its then important to review that/those arrangements to ensure their on target to meet your expectations in retirement, its important to remember inflation can erode the power of the pound, £10,000 for example in your hands today you may think will be enough to cover your day to day expenses. However, if you have another say 10 years until retirement then realistically how far will that £10,000 get you? That’s when pension planning again becomes important, a good financial adviser can suggest if you need to change your attitude to risk (take more risk for potential gains), increase your regular or yearly premiums or generally review your arrangements.

Once you’ve reached retirement age you then need to consider securing an income for the rest of your life, and with people living longer and longer and interest rates currently being so low this can be a real mine field. Many providers allow open market options where you can get an annuity from the market place (annuity is like an insurance policy that your pension pot purchases, an insurance company then gives you a regular income for that pot for the rest of your life, annuity providers are gambling on how long they think you’ll live) Again a financial adviser can help steer you into the right direction, and with new legislation in place, annuities no longer need to be bought, individuals can draw directly from their pension pots.

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