At Aurea, we will discuss your needs, work out what is best for you and take you through each step of the process.
Pensions and retirement are often intrinsically linked, although more and more, retirement means different things to different people and will often involve a gradually winding down of your working life. Pensions have historically been the main method of saving for retirement, and due to the unique tax treatment of pension money, it is likely to continue to be a main part of your retirement provision for the foreseeable future.
In simple terms, a pension is an investment for the long-term, a savings strategy to save money throughout your working career. In addition to this, it becomes an efficient way of doing so due to the up-front tax relief on contributions. Present rules provide full income tax relief on individual contributions into a pension. A basic rate taxpayer’s highest rate of income tax is 20%, therefore it could be expected that pension contributions up to a certain level will attract tax relief of 20%, in other words, a pension contribution of £100 will be paid as £80 from the individual, and £20 as a tax reclaim into the pension.
How much is enough? Very few people really know how much capital is required to fund retirement, or how much to put aside regularly to help you reach that number. Most people underestimate both. It is important to make these calculations early enough in life when you can take small action steps to make sure that you know how much is enough, what your ideal retirement looks like, and we can then help you to get there.
Pension providers and even some advisors will look at your pensions in isolation to check the projections to see if you are on track. The problem with these standard projections is that they are not personalised and take no account of your changing future. Importantly, pensions are only a single part of your wealth. As part of your Retirement Planning we will look at your entire wealth, changing aspiration and build these in to your future. We can never be sure on what the future holds, but by looking at all of your options and factoring in what we know, we can give you the confidence that your decisions are the best ones at that time.
Pensions can be complicated, but sometimes unnecessarily so. The most important aspect of a pension to remember is that it is just a savings plan, like any other investment, it just has special rules and regulations which can be both a benefit and restriction. Employers will provide a pension scheme for you, although in many cases relying on an employer provided pension alone will not be sufficient. We can work with you to decide whether you need to supplement your existing pension contributions. Depending on the scheme that an employer may have in place, we may suggest an alternative pension for top ups, or to use the existing scheme.
Pension contribution levels are ‘capped’, this is known as the annual allowance which is currently at £40,000 per annum. Whilst this may sound a large sum of money, it is highly restrictive, especially when most people can only really afford to make substantial pension savings later in their working life. In addition, high earners have a reduced annual allowance which eventually brings the annual allowance down to just £10,000 each year. We can help you and give you Pension Advice to work through your options, and look at alternatives to help you to build a retirement fund and maximise on opportunities for tax relief, whilst working within the rules and regulations.
Pension investment options have become more and more flexible over the past decade and it is now possible to invest your pension almost identically to any other investment that you may have. This is through the advancement of technology and investment ‘platforms’ where multiple investments can be held in pensions, ISA’s, Investment Bonds and general investment accounts, all within the same home.
When it is time to start to draw an income from your retirement savings, we are here to guide and advise you with our Retirement Planning and give vital Pension Advice, on the most efficient ways of drawing your income. This may well be a combination of all of your accounts to make the best use of all of the available allowances. This may also mean phasing the withdrawal of the Tax Free Cash from your pension to provide tax free ‘income’ in conjunction with taxed income, along with using dividend allowances from investments and making capital withdrawals to use your annual capital gains tax allowance.
When speaking to one of our Financial Advisors and Retirement Planning experts, we will assist you in assessing the considerable tax advantages of saving through pensions in contrast to other options, such as the ISAs.
We focus our attention on assisting the individual as well as the business owner with the typical tactic in funding their retirement in the most cost-effective means while creating a comfortable foundation for each to enjoy an affluent retirement.
Rest assure at Aurea we will always increase the number of reviews on your specific needs in the build-up to retirement. This will be fulfilled by us creating a plethora of strategies to receive your wealth at intervals, assisting with a well-measured shift between full-time employment and retirement.
Once you reach your retirement, we will assist you with a professional breakdown and further guidance on how to invest any of your tax-free sums and how to maximise it to the fullest. We can also help to ensure that your money preserves its inheritable worth for your family. Feel free to book a consultation with one of our professionals in Pension Advice and Retirement Planning to ensure a happy retirement and secure your future with the vital support it deserves.
As you would expect, the team at Aurea surpasses expectations in competence. You’ll be working with Certified Financial Planners and Chartered Wealth Managers.
Whilst you are not tied into a contract with us, our wish is to work with you throughout the different stages of your life, from the early stages of your family, through your work successes, to retirement and beyond.
We are deliberately a small company working with a select number of clients and their families. This means we get to know you and work with you as a member of the Aurea family.