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Life after work

Having decided when you want to retire, you should next look at how you’ll want to live and what income you require to maintain your lifestyle.

A rule of thumb might be to aim for an income of a half to two-thirds of your current salary – adjusted for inflation and set to keep pace throughout retirement. Consider what you’ll be doing. Will you be taking more holidays or pursuing an expensive hobby? The chances are, you’ll want to carry on living at the same standard as you do now.

What is a Pension:
In simple terms, a pension scheme is just a type of savings plan to help you save money for later life. It also has favourable tax treatment compared to other forms of savings.
It's never too late or too early to start saving into a pension. Personal pensions are a way of saving for retirement where the taxman adds extra money to a person's savings. Up to generous limits, for example: every £80 you pay in is topped up to £100, giving the money an immediate boost of 20%. Higher rate taxpayers can receive more than this.

On top of this the money grows virtually tax free over the years.
Retirement might seem like a lifetime away, but it will benefit you in the long run to save now and spend later.
If you're young, and at the beginning of your career, you have many years ahead of you during which the money you save can grow through the use of investments. If you're older and think it's too late, it's good to know that you will also benefit from the tax-relief on your contributions and investment growth.


For more information or to arrange a financial planning review please contact us

Changes since April 2015

During the 2014 Budget announcement, the Chancellor introduced the prospect of far-reaching changes to how you access your pension savings when you retire. These changes were confirmed in the Taxation of Pensions Act 2014. Further changes were also announced in the Autumn Statement on 3 December 2014.

The overriding principle is that the freedom granted by these pension changes is good news for all pension savers. However, the increased options could lead to many people making the wrong decisions and paying unnecessary tax, making professional financial advice all the more important.

The main choices at retirement after April 2015 are (in most instances):

• Withdraw your entire pension fund in one go

• Take an annuity

• Draw down your pension savings

• Annuity / draw down combination

The age at which you can draw your pension is currently 55. This is set to increase to 57 from 2028 and, from then, will increase in line with the rise in the State Pension age, albeit remaining 10 years below.

If you're looking to access your pension in 2015, or you'd like advice on your new pension choices, please get in touch. 

Always remember the difference between an old age pensioner and a retired gentleman is MONEY!

If you would like to set up a personal pension plan, contact us and we'll be happy to help.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.