Pension & Retirement Planning

Never too early

Active Financial has been providing Pension and Retirement Planning advice in Teesside and the North East for many years and our thoughts have always remained the same; 'It is never too early to start saving for retirement'. But what are your options? What's involved? And how can you boost your income when you retire?

State of the Art Systems

At Active, we use state of the art, independent systems and have the required higher qualifications to offer you a full Pension Review Service, irrespective of your circumstances. This is something not many other Advisers can offer!

Business or Individual

We are also able to advise Businesses of their obligations under the forthcoming Pension reforms such as AutoEnrolment whereby the Employer must contribute to a scheme on behalf of the Employee, something which will impact upon all businesses and employees.

Occupational Pensions, Company Pensions, Personal Pensions, Stakeholder Pensions, SIPP's - what do all these terms mean?

How do all the types of pension differ? Knowing what's on offer will help you work out what's most appropriate for you. So here's a simple guide to get you started.

Basic State Pension

For 2012/2013, the full Basic State Pension for a single person is £107.45 per week, but your individual circumstances may affect the amount you get.

(More information is available at The Pension Service: www.thepensionservice.gov.uk)

For 2010/2011, the full Basic State Pension for a single person is £97.65 per week week, and £156.15 for a pensioner couple, but your individual circumstances may affect the amount you get.

Note: This link is for general information purposes only. Active accepts no responsibility for information contained or for the site not being available at all times.

State Second Pension (S2P)

S2P was an additional 'top up' state pension paid for by NICs and linked to earnings. You could leave or 'contract-out' of S2P and direct some of your NICs into a Personal or Occupational Pension Scheme instead, however, as from April 2012, this ceased to be an option. All those previously contracted out will now be automatically contracted back in.

Occupational or Company Pensions

Occupational or Company pensions are set up by an employer for their employees. If you're offered a company pension plan it usually makes good sense to join it, because your employer may make regular and/or lump sum payments into your retirement fund. And you will usually be able to make payments as well. This is likely to be even more prominent nowadays following the introduction of the Governments Work Place Pension directive and Auto-Enrolment.

Employees who leave before retirement have various options for what happens to their pension fund, depending on their personal circumstances. When they come to retire, they'll normally receive their pension in line with the rules of the company pension plan.

An employer who doesn't run an occupational plan may offer access to a group personal pension instead. This is a collection of personal pension plans grouped together to make administration costs more effective and to maximise investment growth.

Personal Pensions

If your employer does not offer a company plan, or if you're self-employed, you could consider paying into a personal pension.

This means paying a regular and/or lump sum to your pension provider, who invests the money on your behalf. You use the fund that has built up to provide your income at retirement. You can personally choose the level of risk you are prepared to take with your retirement fund and also the areas in which you invest. Please see our Investment Planning page for what Active can offer you.

A may also consider a Stakeholder scheme which is designed to be more straightforward and have lower costs than some other types of company or personal pension.

You can take out a Stakeholder Pension if you:

• are employed (you may be able to have one in addition to a company pension)
• are self-employed

It has the benefit of tax relief on savings of up to £3,600 each tax year and it doesn't matter whether you have a source of income or even pay tax! Individuals who have a source of earned income may be able to invest more than £3,600 subject to age and proof of earnings.

A Stakeholder Pension can also be taken out as a tax efficient investment for:-

• Children/Grandchildren - with contributions paid by Parent/Grandparents
• Non-working spouses - with contributions paid by the working spouse
• People who have already retired
• Carers
• Expatriates - who may contribute to plans for family members who are still resident in the UK

Inheritance Tax Mitigation

Grandparents who are keen to give money to Grandchildren can now pay into a Stakeholder Pension Plan for them and allow the child to enjoy a generous tax break. Like other forms of investment plan, the pension can be used by Grandparents to avoid Inheritance Tax on the basis that regular contributions may be treated as normal expenditure out of income. If so the grandparent would still be able to use their annual Inheritance Tax exemption in addition to the Stakeholder contribution.

Please Remember; to achieve your desired goals, your Retirement Fund should be reviewed regularly and should always meet with your current objectives and attitude to risk. Failure to address these issues and review your portfolio can lead to disappointing results.

The Financial Services Authority does not regulate taxation and trust advice.

Please pick up the phone and speak to one of our team about how we can help further. We would be delighted to hear from you.

Email: pensions@activefinancialservices.co.uk Phone: 0845 555 0 888

 

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