Frequently Asked Questions2021-11-16T12:55:09+00:00

Frequently Asked Questions

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What is Retirement Cash Flow Planning?2024-02-05T13:25:43+00:00

Retirement cash flow planning is the process of forecasting your income and expenses during retirement to ensure financial stability. It involves calculating expected income from pensions, savings, investments, and other sources, and comparing it against anticipated expenses.

How Much Cash Flow Do You Need To Retire?2024-02-05T15:13:30+00:00

The amount of cash flow you need to retire comfortably varies based on your lifestyle, location, and personal goals. A common guideline is to aim for a retirement income that’s about 70-80% of your pre-retirement annual income.

Do I Need A Financial Adviser?2024-02-05T13:31:44+00:00

Whether you need a financial adviser depends on your comfort level with managing your finances and the complexity of your financial situation. If you’re unsure about making investment decisions, planning for retirement, or navigating tax laws, consulting a financial adviser can provide valuable insights.

What is a Good Pension Pot at 55?2023-04-27T22:43:55+01:00

A comfortable retirement income is one that allows you to maintain your standard of living after you stop working. The amount of income needed to achieve this will vary from person to person, depending on their individual circumstances.  This article explains further:

How Do I Consolidate My Pensions2021-02-21T11:11:29+00:00

You will need to contact your pension providers to get transfer values. Then ask them to transfer the funds into your new pension plan.

Or, we can do all this work for you following a financial review.

Can I Pause Or Cancel My Pension Contributions?2023-03-07T17:34:37+00:00

Whilst it is, of course, possible to pause or cancel pension contributions, the impact on your pension savings and therefore your retirement income could be significant. I highly recommend that you speak with your pension provider, or get independant financial advice before taking any action.

For further information please read the following article:
Pausing or Stopping Pension Contributions

What Is Ethical Investing?2023-03-07T17:34:49+00:00

Ethical investing is an investment approach that takes more than just financial return into consideration when deciding where to invest.

The goal is to align the investor’s personal values with the investment, looking at aspects of company practices and policies in areas such as human rights, environmental sustainability and social justice.

It is also known as socially responsible investing (SRI), sustainable investing, impact investing or vales-based investing.

Find out more in the following article:

Are Pension Contributions Taxable?2023-03-07T17:34:42+00:00

There is some confusion about whether or not pension contributions are taxable. In general, contributions to a pension plan are considered to be a pre-tax expense.

This means that you will not have to pay taxes on the money that you contribute to your pension plan. However, there may be some exceptions to this rule.

For example, if pay more than your annual allowance, or 100% of your earned income (e.g. salary and/or taxable benefits), you may be subject to additional tax on your pension contributions.

What is a Workplace Pension?2023-03-07T17:34:54+00:00

A workplace pension, also known as an occupational pension, is a retirement savings plan offered by an employer. Employees contribute a portion of their monthly salary to the plan, and the employer often matches those contributions. The money in the plan grows over time, and can be withdrawn once the employee retires.

There are several advantages to having a workplace pension.

1) Workplace pension tax relief

Workplace pensions offer tax breaks. The money that is contributed to the plan is not subject to income tax, so employees can save more of their salary.

2) Fees

Workplace pensions often have low fees. This is because the employer often covers the cost of the plan

3) Growth

Workplace pensions are a great way to save for retirement. The money in the plan grows over time, and can be withdrawn once the employee retires.

4) Regulated

Workplace pensions are regulated by the government, so employers cannot take the money out of the plan. This ensures that employees will have enough money to live on in retirement

What is a Stakeholder Pension?2022-04-04T16:42:07+01:00

A stakeholder pension is a type of pension plan that is designed to benefit both the employer and the employee. It is a defined contribution plan, which means that the amount of money that is paid into the plan is predetermined.

This type of plan is different from a traditional pension plan, which is a defined benefit plan. With a defined benefit plan, the amount of money that is paid out to the retiree is based on a formula that takes into account the employee’s salary, years of service, and other factors.

A stakeholder pension plan can be either an occupational pension plan or a personal pension plan. An occupational pension plan is one that is offered by an employer to its employees. A personal pension plan is one that an individual sets up on his or her own.

There are several advantages to having a stakeholder pension:

  1. The employer and employee both make contributions to the plan. This can help to lower the overall cost of the plan.
  2. The funds in the plan are portable, which means that the employee can take them with him or her if he or she changes jobs.
  3. A stakeholder pension plan is also flexible, which means that the employee can choose how to invest his or her money. This gives the employee a lot of control over his or her retirement savings.
  4. Finally, a stakeholder pension plan is easy to set up and does not require a lot of paperwork.

There are several disadvantages to a stakeholder pension plan as well

One disadvantage is that the employee may not be able to access his or her funds until he or she reaches retirement age.

Another disadvantage is that the employer may not contribute as much money to the plan as it would to a traditional pension plan

A stakeholder pension plan is a good option for employers and employees who want to save for retirement. It is a flexible, low-cost plan that gives the employee a lot of control over his or her retirement savings.

How Much Is The UK New State Pension?2024-06-04T15:04:33+01:00

The full new State Pension is currently £221.20 per week (as at April 2024).

For more information please visit our Ultimate Guide To The UK State Pension

How To Unlock Or Cash In Pensions At 552023-04-27T22:36:47+01:00

Under pension freedoms, the rules allow anyone aged 55 and over to take the whole amount of their pension pot as a lump sum, 25% of this will be tax free, but the rest being taxed as earned income in the year it’s taken out.  Find out more here:

How Can I Transfer My Pension Myself Instead Of Using A Financial Adviser?2023-02-05T17:46:10+00:00

It is possible to transfer an occupational pension scheme, to a personal pension or a SIPP yourself.

However, if the CETV (Cash equivalent transfer value) is above £30,000 or includes safeguarded benefits or guarantees, then advice from a financial adviser is required.

Find out more in the following article:

How Can I Use Flexi Access Drawdown To Receive A Flexible Retirement Income2021-02-21T11:10:40+00:00

You can leave your money in your pension pot and take an income from it.

Any money left in your pension pot remains invested, which may give your pension pot a chance to grow, but it could go down in value too.

Pension Annual Allowance – How Much Is It?2019-04-25T15:10:30+01:00

The annual allowance is a limit on the total amount that can be paid into your pension scheme(s) each year and still receive tax relief.

The annual allowance is currently capped at £40,000.

What Is The Pension Lifetime Allowance2023-11-06T22:53:38+00:00

The Lifetime Allowance (LTA) is a limit on the amount of pension benefit that you can draw out from your pension scheme(s), whether lump sums or retirement income without triggering an extra tax charge.

The Lifetime Allowance for most people is £1,073,100 for the tax year 2023-24. It applies to the total of all the pensions you have, including the value of pensions.

The charge for breaching the LTA limit was removed in April 2023, and the allowance will be abolished completely from April 2024.

What Happens To My Pension When I Die2019-04-25T15:10:39+01:00

Your unused pension pot wouldn’t normally be included in your estate for Inheritance Tax purposes.

In addition, if you die before age 75 your pension pot will pass tax free to your beneficiaries, provided the money is paid within two years of the pension provider becoming aware of your death.

If you die after the age of 75, then the remainder of your pension pot will still pass free of Inheritance Tax, but any benefits withdrawn will be taxed at the beneficiary’s marginal income tax rate.

Residential Nil Rate Band – What Is It?2023-11-06T23:42:14+00:00

From 6 April 2017, the Residential Nil Rate Band (RNRB) became available for residences inherited by direct descendants (see below) in addition to the existing Nil-Rate Band (NRB) which is currently £325,000.

From 2017/18 the RNRB was phased in, starting at £100,000, and increasing by £25,000 each year until 2020/21 when it reached the maximum level of £175,000 (frozen until at least April 2026). The current rate of NRB will be frozen at £325,000 during this period.

As with the NRB, any unused RNRB can be transferred to a surviving spouse or civil partner, with the effect that the maximum combined IHT threshold for such couples cold be a total of £1m from 6 April 2020.

What Is The Inheritance Tax Threshold2019-04-25T15:10:50+01:00

The current inheritance tax (IHT) threshold is £325,000 per person. It doubles to £650,000 for a married couple-as long as the first person to die leaves their entire estate to their partner.

How Does A SIPP Work (And Who Can Have One)2021-02-21T11:09:30+00:00

Saving for a retirement via a SIPP pension puts you in control of your financial future.

Just like any other kind of pension, Self-Invested Personal Pensions are designed to help you save for retirement and take an income when you reach it. Any individual who is resident in the UK under the age of 75 may make contributions to a SIPP, and in certain circumstances non-UK residents who have had UK earnings in previous years may also be eligible.

How To Avoid Inheritance Tax2021-02-21T11:04:59+00:00

There are effective and legitimate ways to mitigate against the impact of Inheritance Tax. But some of the most valuable exemptions must be used seven years before your death to be fully effective, so it makes sense to consider ways to plan for Inheritance Tax sooner rather than later.

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