UNDERSTANDING YOUR PENSION & THE OPTIONS AVAILABLE
Most of us receive an annual update on our pension from either our employer or in the case of a personal pension, from the provider themselves. Despite many years of regulation and attempts to make these statements more relevant, for many clients they offer little to help understand what benefits may actually be available at retirement. This is where we start to help clients plan for retirement by bringing together a plan to show what income may be in retirement and how to build that forecasted income if necessary. We advise on a range of pension topics to assist our clients in deciding which is the best option for them.
PERSONAL PENSION / SELF INVESTED PERSONAL PENSIONS
Pensions legislation introduced in recent years has resulted in more options being available to clients than ever before. By taking independent advice you can ensure that the choices you make are most suitable for you rather than just accepting the default choices offered by your workplace pension or personal pension provider. There are many factors to consider, annuities (providing a guaranteed income for life) can still be a worthwhile option. The annuity market is competitive and we can often obtain a higher income for you by researching the market. When deciding on your income needs, ideally you should plan to take your income as tax efficiently as possible.
INCOME DRAWDOWN AND FLEXIBLE DRAWDOWN
This allows you to take income from your pension in a format that best suits your requirements, either as lump sums or regular income. Care must be taken to try and ensure that the funds last to provide you with a sustainable income. We also advise you on death benefits to ensure that your dependants are well provided for on death.
LASTING POWERS OF ATTORNEY (LPA's)
For all our clients starting to take retirement benefits, we recommend that we draft LPA's for you. This ensures that if you ever lose capacity in the future that the people you choose (usually your spouse/partner and or children) can manage your affairs on your behalf. There is often a mistaken belief that your next of kin are legally able to act on your behalf with an LPA in place but that is not the case. This can be especially difficult when pension income needs to be managed because without an LPA adjustments may not be possible. Those you appoint are legally obliged to act in your best interests.