At Retirement Planning
The concept of retirement has changed compared to what it was historically. More people are choosing to reduce their working hours and transition into retirement. The changes to how people take their pensions in 2015 have given retirees more choice than ever. However, it can be difficult to weigh up the different options and the associated tax consequences.
Under the new rules, those aged 55 with a defined contribution pension (a pension based on how much is paid in) can now access their pension in the following ways:
- Withdraw the pension in full or in part – All withdrawals will be 25% tax free and 75% taxable.
- Move the fund into drawdown – Up to 25% of the fund can be drawn as a tax-free lump sum and the balance can be used to provide a taxable income.
- Purchase an annuity – Up to 25% can be withdrawn as a tax-free lump sum and the balance is used to purchased an insurance contract that provides a guaranteed taxable income for a fixed term or for life.
This has provided incentive for those approaching retirement to plan ahead particularly as life expectancy increases and later life care becomes part of the financial equation.
We can review your existing pensions to help you understand what options are available from your existing contracts and what income your pensions can provide you in retirement.
If you are considering leaving your pension invested and drawing an income from it in your retirement, the volatility of the investments is as important as the performance of the investments because withdrawals from a volatile investment risk reducing the fund quicker than from a stable one. We can help you to build a suitable investment strategy to support your withdrawals in retirement.
For further information, or to arrange a no obligation appointment, contact us today by telephone on 01626 242500 or email [email protected].
WBW Chartered Financial Planners is a trading style of Centurion Wealth Management which is authorised and regulated by the Financial Conduct Authority (FCA). Registered in England and Wales Number 7001057. Registered Office: Channel Court, 8 Hill Road, Clevedon, Bristol, BS21 7NE. Registered in England and Wales.