Pensions

Richwood Financial Services Ltd

For Independent Advice Call : 01225 769815

OR email : info@richwoodfs.co.uk

Pensions

Saving for an event that can be 30 years away can be a daunting prospect.

Here are some tips about what you should be considering, wherever you are on

the path to retirement:

20+ years to go

Start a pension - the longer you save the more time it will have to grow
Take advantage of employers' pension contributions
Consider saving into a more flexible investment vehicle and delaying moving it until you are a higher rate taxpayer - although the higher tax relief isn't necessarily guaranteed
Spread your pension investments and take advantage of more volatile markets

10 years to go

Catch up on any periods when you didn't pay into your pension by taking advantage of the high annual allowances, especially if you receive a one-off lump sum such as an inheritance.
If you are considering taking an annuity, stock market proof your pension by moving gradually into less risky investments such as fixed interest and cash.
Get a State pension forecast from the Pension Service and consider making voluntary National Insurance contributions for missing years.

One year to go

Check your pension savings are on track to provide the income you need and that your fund isn't likely to bust the lifetime allowance.
Consider how you want to take an income from your pension and make sure it is in the most appropriate investments.
Think about moving other investments into your pension to take advantage of the tax relief.
Contact the Pension Service, former employers and personal pension providers to make sure any pension entitlement is in place.

Accessing your pension

There are a number of different ways to take income from your pension. These include:

Tax free cash - you can take up to 25% of your fund tax free when you start taking benefits.
Annuity - these provide an income for life and can be index-linked to keep pace with inflation. Additionally two new annuity options - a protected annuity, which returns any used capital if you die before age 75, and a short-term annuity, which runs for up to five years - are now available.
Phased retirement - this is available before age 75 and allows you to take part of your pension fund as an annuity and tax free cash while leaving the remainder invested and benefiting from further growth.
Income drawdown - also available before age 75, this allows you to take an income from your pension but leave the rest invested. As you can vary the level of income this is more flexible than phased retirement, although the two options are often combined.
Alternatively secured pension - this was introduced in April 2006 and offers an income drawdown style alternative to taking an annuity once you reach age 75.

The way in which you take a pension income will depend on a number of factors including your life expectancy, the size of your pension fund, other income sources and investments and your attitude to risk.

The FSA does not regulate some forms of mortgage, education fees planning, tax planning or inheritance tax planning.

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Richwood Financial Services Ltd is authorised and regulated by the Financial Services Authority.

FSA Registration No: 450457. Registration can be checked on the FSA’s website

www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234.

Richwood Financial Services

4 Narrow Wine Street

Trowbridge

Wiltshire

BA14 8EN

Tel : 01225 769815

Email : info@richwoodfs.co.uk