Our Retirement Advice Service

Thinking About Retirement?

Most people just don’t save enough to achieve the level of retirement income they need. Despite pension schemes providing annual statements to their known members (they can't send them to members that have lost track of their pensions), many people don't check them or review their pension planning decisions, just when the old state arrangements have never been weaker to support our older generations.

The state system is simply insufficient to support most people's aim of a comfortable retirement.

Through our retirement advice service we aim to help you decide how much extra money you need to save, and where to invest it, having understood what your retirement objectives are.

We can advise on how sustainable your plan for income in retirement is, especially as people are living longer. Receiving a state pension is no longer seen as being the date you give up work, as we find more and more often our clients are looking to gradually reduce their working hours and looking to top up income as a result of this reduction in salary.

We appreciate our clients each have different needs concerning lump sums, guaranteed income (from annuities) and variable income. So there are different ways of taking retirement benefits and the products that facilitate them.

We also consider the other products and investments our clients hold and how these could be used to meet financial goals, so as to preserve the tax and inheritance benefits of the pension product wrappers and take advantage of the benefits that other products can offer. If clients need an annuity but are suffering from specific conditions we will always look out for higher annuity rates and therefore increased income payments.

Accessing Pension Benefits - Capital and Income

Through our retirement advice work we are often asked to help clients access tax free cash and / or to set up an income for them. We always want to talk in detail with our clients to make sure they get the best value for money from their pension pots and other savings, to maximise tax efficiency and growth opportunities.

Taking Cash Lump Sums in Retirement

Although you could close your pension pot and take the whole amount as cash in one go if you wish you would have nothing left from the pot to give you an income for the rest of your life - including providing for any longer term care needs you might have.

You could also treat your pension pot like a bank account and make several withdrawals when you need to.

Some things you should bear in mind before taking out a cash withdrawal or a lump sum:

  • Not all pension providers can handle cash withdrawals.
  • There may be high fees or charges for each withdrawal.
  • There may be high tax charges. Only 25% of each withdrawal (or of your lump sum) is tax-free – the remaining amount is taxable and this may push you into a higher tax bracket.
  • There may be a maximum limit on the number of times you can make cash withdrawals.

We see our role in providing retirement advice in making sure you understand your needs and objectives and the consequences of various decisions.

Providing an Income in Retirement

Relatively recent changes in pension legislation mean you have a wide range of options for an income in retirement, which is good news when it comes to getting independent retirement advice.

If you’d prefer to receive a regular income for life after your stated retired age, then using your pension fund to purchase an annuity could be right for you. Alternatively, you could decide to keep your pension invested and take a regular income from your pot as and when you need it – this is called income drawdown.

Our aim, through our retirement advice service, is to help you develop the most tax-efficient option to maximise your financial security in retirement.

Retirement Advice on What You Can Do With Your Pension Pot

We understand that making decisions about retirement can be confusing - so there's nothing better than knowing that great independent retirement advice is available in the comfort of your own home.

Your pension pot is the total amount of pension contributions you and/or your employer have made to save for your retirement. Your pot also includes any capital growth earned from the fund’s investments, depending on how your scheme was set up. Your pension pot doesn’t include your State Pension which is provided by the government.

Each pension company should send you a pension statement once a year that tells you how much your pension pot is worth, or there may be an option to check this on their website.

You would normally have reached age 55 as a minimum before you can access your pension pot. You may be able to withdraw your pension earlier if you’re retiring because of poor health or disability, but the rules depend on your pension scheme.

Be aware of pension scams as you are nearing pension age. Fraudsters are more likely to approach you with advice about withdrawing and investing your pension. They may attract you by making a false claim that you can access your pension before you’re 55.

You have the freedom to choose how you use each of your pension pots, based on what best suits your needs. Each option comes with its own set of rules, fees, benefits, risks and tax issues. Deciding what to do with your pension pot can be complicated – there are many factors to consider and financial terms to understand.

That's where great independent retirement advice can make a massive difference. We want to discuss your lifestyle, partner or family situation, your age & long-term health, your current and future care needs, and any other sources of income.

Pension Pot Consolidation

We regularly meet clients who have a number of active and/or dormant pension plans already. We can help you make sense of these plans and determine if the funds are delivering on your expectations.

These kinds of pensions are often not set up to match your objectives, often don't have the right mix of investments, and in many instances are more expensive than what else is available by consolidating them.

Through our retirement advice service we may also be able to save you money by arranging for your pensions pots to be put into one easy-to-manage, lower cost solution - and if its not in your interests we will tell you!

The key advantage when consolidating pension plans ranges from advantageous cost savings, tax planning benefits, ease of administration or to take advantage of new legislation that legacy plans are no longer able to keep pace with. Clients looking to consolidate their plans should be looking for help before doing so as we can evaluate the benefits and drawbacks of doing so and ensuring you understand the best course of action.

We can take into consideration drawdown options, flexibility, and the charging structures which apply. We can then look into the investment solutions the new plan offers depending on your specific needs and retirement goals.

Topping Up The State Pension

Many people do not qualify for the full state pension. However it is possible to find out how much your pension will be worth from the government website, and we can discuss whether it might be worth your while topping it up.

Hundreds of thousands of people who have stopped work before the state pension age are being urged to check whether they can top up their state pension at “heavily subsidised rates”. This will be particularly relevant to people who in the past were in pension schemes which were contracted out of part of the state pension system and who will not otherwise get a full state pension as a result.

You can check by going on the government website ‘check your state pension’. Early retirees should check their National Insurance (NI) record to see whether they have any gaps in qualifying years towards their state pension, their eligibility to pay voluntary contributions, and if not, how much it would cost for topping up their NI record. A voluntary Class 3 NI contribution can add considerably to your state pension provision.

Knowledge and Expertise

Because retirement advice is a potentially complex subject there isn't enough room to go through all the points here. Rest assured that we stay up to date with HMRC requirements and pension company solutions to our clients' needs.

Please Get In Touch

You can telephone our office on 01522 788887, we always look forward to speaking with our clients.

Alternatively, you can email us. Our address is ian@chestnutfs.co.uk

Or please complete this contact form and we will get back to you as soon as possible!

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The value of pension and investments and the income they produce can fall as well as rise. Pensions are a long term investment. You may get back less than you put in. Pensions can be and are subject to tax and regulatory change; therefore the tax treatment of pension benefits can and may change in the future.