This week is #PensionAwarenessWeek.
Here at Lifetime we heartily agree it is a subject that needs raising awareness of!
Pensions can be a complex subject and we understand the importance a pension can play in someone’s life.
- Do you know what sort of pension you have?
- Do you know where your pension is situated?
- Do you know if you can retire early?
- Do you understand the options available to you?
- Do you understand the complexities/features of your current plans?
Worries about retirement provision are a particular concern, with many people unsure of what their pension will provide or when they might be able to retire. This uncertainty also has a direct impact on businesses, with 45% of employers reporting difficulties with regards to succession planning.
Here are some insights into how a pension can help you.
Are pensions worth it?
In short – yes! One of the main benefits is that, when you pay into a workplace pension or a personal pension, you can get money back from the government in the form of tax relief.
It is a way of encouraging you to prepare for your retirement and it effectively amounts to free money, so it is best to make the most of it.
What options do I have at retirement?
You now have more choice and flexibility than ever before over how and when you can take money from your defined contribution/personal pension pot. Here are some of the available methods.
- Leave your whole pot untouched
- Guaranteed income (annuity)
- Adjustable income
- Take cash in chunks
- Take your whole pot in one go
- Mix your options
We believe each route requires careful consideration and advice where possible as what you decide now will affect your retirement income for the rest of your life.
When can I take my money?
A great benefit of pension plans is that you can usually start taking money from them from the age of 55 (this will change to age 57 from 2028). This is well before you can receive your State Pension.
Whether you have a defined benefit or defined contribution pension plan, you can usually start taking money from the age of 55. You could use this to help top up your salary if you are still working, to enable you to work fewer hours or to retire early. You may also be able to release a cash sum from your pension too.
There are also some circumstances when you may be able to take money from your pension even earlier than 55, such as if you’re in poor health.
If you need any help at all understanding your pension then please get in touch.
We aim to simplify pensions for you and add value to your overall financial planning.