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Pension Management in Clacton
Ensuring you have sufficient income when you retire is a concern that many of us share. We all have dreams of what we want to do when we retire, whether its spend more time with the family, go on a worldwide cruise, or buy a holiday home in the sun. But, how much is enough?
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Ultimately, three factors affect our pension funds, the level of contributions that are made, the performance of the funds and the cost of the plan.
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There are so many unknowns including future inflation, our state of health and how long we will live.
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We understand the concerns our clients have and can help you plan your retirement no matter what stage of life you are.
ABOUT TO RETIRE
If you are about to retire we are able to explore your retirement options which would include looking at taking benefits from any pension arrangements or investments you have. This is to determine the level of income that you need to maintain your standard of living and enjoy a comfortable retirement.
PENSION REVIEW
Many clients approach us to review their existing plans. We can investigate your plan, looking at the contract charges, funds invested, whether the risk being taken meets the risk you are willing to take, commonly known as your attitude to risk. We can ascertain approximately how much income you will receive when you retire.
SAVING FOR RETIREMENT
With so many pension products on the market, it can be confusing as to what is the best one for you. Following a detailed consultation, we will research the whole of the market and present our findings to you. Employing the services of an Independent Financial Adviser means you will get an unbiased report based on your objectives, your attitude to risk and the suitability of the proposed pension product according to your current situation.
Defined Benefit (Commonly referred to as Final Salary Pension)
This scheme is based on number of year’s service and the salary that you receive. This is disclosed at outset although during the employment can be subject to scheme rules changes. It is easy to see what income you are likely to receive at retirement because of the guarantees built into the scheme. The member will pay a percentage of salary into the scheme the employers contributions are not defined as they have to guarantee the benefits at retirement.
We have now seen these become almost extinct in the private sector due to employer contributions rising to make up the guarantees. The public sector still enjoys Defined Benefit schemes as they are backed by the Government. Although we have seen adjustments made to these schemes which have caused controversy with the public sector employees.
Money Purchase Pensions
The income at retirement is based on the final fund value at retirement. Below is a summary of just some of the money purchase plans available.
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Occupational Money Purchase Pensions
These are run by the employer and are based on a percentage of employee and employer contributions. There are no guarantees built into these plans and the pension income is determined on the final fund value at retirement. These fall under occupation pension scheme rules.
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Personal Pension
A personal pension is an individual pension which is generally taken out through an Insurance Company. There are normally several funds by which to choose. Self employed, employed and employers can contribute into the scheme.
Stakeholder Pension
A Stakeholder Pension is similar to a Personal Pension with the main exception being that fund charges are capped meaning that often these can be less expensive than a Personal Pension.
Group Personal or Stakeholder Pension
An employer may set up for its members a group scheme. This is the same as a Personal or Stakeholder Pension except the employer will make the contributions on behalf of its members and deduct contributions from payroll. The money is then dispersed by the provider into individual pots within the group scheme.
If you leave the employer often you can take your pension with you.
Self Investment Personal Pension (SIPP)
This comes under the same rules as personal pension legislation. However, you are allowed to access different investment instruments within the scheme. For example, you could buy a commercial premises directly held within the scheme, or trade stocks and shares directly.
Often, there can be increased costs for such a scheme.