Pension Problems Solved Over The Phone
October 4th, 2007
In the latest of our phone-in surgeries, Torquil Clark Financial Planning teamed up with local newspaper the Express & Star to give readers the opportunity to have their pension questions answered. The aim of these surgeries is to help those who wouldn’t normally choose to talk to an Independent Financial Adviser.
Despite being declared a nation who love to spend on credit, the telephone lines were jammed as readers called in to speak to our pensions experts, wanting to know how best to provide for their retirement years.
Philippa Gee, our Investments Director said: “We were really pleased to see that a number of calls came from the younger generation. Many people wanted to start saving early, which is absolutely the right approach, but just didn’t know where to start.
“This is a common stumbling block for many people, when in fact it’s a straightforward process. If you are working, then it is likely that your employer will have a scheme that you can join. They may even contribute or match what you save into a scheme, so this is a good place to start. If you are not, then starting your own pension is a must.
Pensions are a great savings vehicle for retirement because of the tax relief they provide. For every £1 invested, you only have to contribute 78p – the Government top up the rest. If you are a higher rate tax payer then the benefit is even greater as you can claim back the additional tax when you self assess. The restrictions on accessing the fund until retirement age, currently 50 but changing to 55 from 6th April 2010, stop you dipping into the money whenever you please. This means your fund is protected from temptation until you reach your retirement years.
Protecting a pension as you approach retirement
Looking after a pension investment is crucial and many readers wanted to know how to protect the money they had saved as they were approaching retirement.
“It was good to see that people were realising that maintence of a pension fund is as important as saving into it” said Philippa. “The funds your money are invested into dictates how well the investment performs, as well as dictating how exposed your money is to stock market fluctuations. If your fund is not managed, then it is important to get reviews every five to ten years to ensure it is working to meet your retirement expectations. The key is to reduce the level of risk and exposure to the stock market the closer you get to your retirement date.”
Close to retirement
How do I make the most of my pension fund when it comes to buying an annuity? was a question raised several times. “These weren’t just queries about how to shop around, so you get the best level of income in return for your pension pot” said Philippa. “Neither was it about whether to chose a standard annuity or one which will rise in the future alongside the cost of living” she added. “They were questions about how the current state of the stock market could effect annuity rates, a really important consideration. The simple fact is that the current stock market conditions may mean that the value of your pension is lower than it was a few months ago.
“What was pleasing about the calls received, is that it is clear people are taking control of their pension and their retirement plans, which is positive news. Those who want to spend their retirement years living on a comfortable income are making provisions now, not leaving it to chance or relying solely on state benefits.”
If you would like to speak to one of our pensions experts about planning for your retirement or an early review of your pension arrangements, call 0800 294 7199 or click here.
Author: Jenny Challenor
October 4th, 2007
Category: Financial Advice.
