Making the correct decisions when you come to retire is so important and obtaining the right advice is vital.
At ad+ financial we have a vast level of experience and expertise in this area to help you make the best decisions for you and your family.
Generally, most individuals have simply taken their pension income from the company that their pension has been saved with. However, in many cases, this means you may not be getting the best available deal. At retirement, there are many different options that could and should be considered before making a decision that can make the difference between a basic or comfortable retirement.
An annuity is a guarantee of income for the rest of your life provided by an annuity provider. For standard annuities, there is a highly competitive market that we can access for you to ensure that you obtain the highest level of income. A Financial Conduct Authority review estimated that 80% of people would benefit from taking their annuity income from a provider different from the one they built their pension with. There are a variety of options you can take if you buy an annuity. These include ongoing income for your spouse/ partner should you die first, inflation proofing and different guarantee periods.
ad+ financial can help you decide which is the most appropriate option for you and investigate on your behalf, who is the best provider of these options. Should you have a health condition, there is the potential to obtain a higher rate of income and again we can ensure that you receive the highest level of income possible structured in a way that suits your circumstances.
Whilst annuities will provide you with a guaranteed income for life, due to recent changes in Pension Legislation it has become more popular for people to take their pension benefits in a more flexible manner. This has been due to a number of factors and due to the fact that annuity rates have reduced over recent years as they are linked to interest rates/gilt yields and increased life expectancy thus producing a lesser return.
More people retire gradually' and work part time for a number of years prior to fully retiring; therefore many people require flexibility over the income they receive. The most flexible form of accessing pension benefits is by accessing Income/Flexible Drawdown. There is a great deal of flexibility offered including the option to take the Tax Free Lump Sum (generally 25%) of the pension without accessing any income. This has been popular for individuals who wished to access funds for a variety of purposes (paying off mortgage/helping children buy a house) but it is extremely important that advice is sought as this will have an effect on the income available in retirement. In addition, the remaining pension fund will remain invested and taking advice on how this is structured and the level of risk you take is extremely important. There is also flexibility in the level of income that a client can access from their pension fund. From April 2015, individuals aged 55 or over are able to access their entire fund whenever they want. However, advice is vital as most individuals will require their pension fund to fund their retirement for the rest of their lives. In addition, there can be significant tax issues as only a portion of a pension fund (normally 25%) can be accessed tax free. The remainder is generally taxed as income at your marginal rate.
Whilst the flexibility offered can be a significant benefit to individuals, it makes it even more important people obtain regular reviews of their retirement planning. This would focus on a number of areas such as the investment make-up and risk of the pension fund, ongoing income requirements, and taking benefits in a tax efficient manner. Overall, it is essential in that individuals obtain advice regarding their retirement plans and this puts even greater emphasis on making the right decision. At ad+ financial, we pride ourselves on the ongoing service and reviews that we provide our clients that have signed up for one of our ongoing services with to ensure that even beyond retirement age they continue to receive advice which is relevant to their circumstances.