Wednesday 28 December 2011

WHEN THERE ISN’T ENOUGH PENSION

Equity Release is a term referring to a set of options for taking a lump sum or an income from your property if the pension income needs to be supplemented. Options are available as early as age 55 but these options are really only available for those with little or no mortgage commitment on their property. We can quickly advise you on what your options are.

Monday 19 December 2011

TAKING PENSION BENEFITS

Pension rules are changing regularly as regards how and when you can take your pension benefits. Currently the earliest you can take pension benefits is age 55. Because we are now living longer, we need to consider how best to take the benefits to service us for a long retirement. Living longer and the current economic conditions are combining to give us less pension income than in the past. Here too it is important to take advice.

In the past there used to be only one choice – to take the income offered by the pension provider you had saved with. Now there are many more choices:
1. You can shop around for the best income (annuity).
2. You can take your Tax Free Cash and leave the rest invested until later with the option to take an income from the pension fund.
3. And, most recently, there are Fixed Term Annuities. These allow you to take one’s Tax Free Cash and take a guaranteed income for a specified term, with the certainty of a cash sum waiting at the end of the fixed term which you can then use to set up another Fixed Term Annuity or a Lifetime Guaranteed Income. Since the rates on offer for pensions (annuity rates) have been poor and have continued to fall, this approach keeps your options open.

It is important to make the right choices when you take your benefits, as they will affect your income for the rest of your life. We will be pleased to help advise on all the retirement options open to you.

Monday 12 December 2011

PENSIONS - THE END OF CONTRACTING OUT

For many years people who were employed had the option to take an annual payment into their pension instead of notching up qualifying years in what was called SERPS (State Earning Related Pension Scheme) and is now called the State Second Pension. This payment represented a return of some of their National Insurance contributions for the year in question, so it was not a gift from the Government. From the 6th of April 2012 the Government is ending this option. From that date forward the only option for the employed will be to build up entitlement year by year for the State Second Pension. The self-employed never had this option. The self-employed and employer alike are entitled to the full Basic State Pension if they pay the required number of years of National Contributions. The Basic State Pension has nothing to do with Contracting Out.

Friday 2 December 2011

PENSIONS – NOT TO BE IGNORED

We are in a time of change as regards pensions. Those retiring in the next 5 or 10 years will benefit from something of a Golden Age of works pensions and State benefits. Those who are younger face an uphill battle to acquire sufficient monies to give them a meaningful income when they hit retirement age. Pensions require forward thinking now, as for most of us they are not automatically part of our jobs, as they used to be. Factually those in their 20s and 30s should already be putting at least 15% of their earnings into long range savings like pensions. Even that is only really a very basic level of savings. It is particularly hard with the extra pressures of rising costs and the goal of buying a property. Take advice and ensure you are looking ahead as well as coping with present situations.