A pension is probably not the most exciting subject to the vast majority of people but its importance far outweighs its popularity
If you’re already retired and enjoying a lifestyle provided by your company or personal pension, then you may well consider yourself in a fortunate position. If you’re just embarking on the early stages of your chosen career, then you probably understand that having an income when you no longer have to get up for work is a pretty sensible thing to do.
The truth today is that thousands of people do not know how their working career will pan out or even actually have a particular plan for it, but if this is you then there is still a need to consider life after retirement. Putting some of your hard-earned income on one side makes good sense, even though you may have some very different priorities at present.
So how do you do it?
If you’re an employed person, saving for your eventual retirement is a much easier thing to do than it used to be.
It’s highly likely that your employer has set up a company based pension scheme that you can join.
In fact, if you’re aged 22 or more and earn more than £10,000 per year then you’ll actually be automatically enrolled into whichever pension scheme your employer has selected.
If you run your own business…
… things are not quite so simple or automatic and you may need some advice. That’s where Cansquared can help…
We will first of all try to understand your own specific circumstances and objectives and also aim to establish your attitude towards investment risk, even if you don’t yet know you have such a thing!
We will then research any suitable pension providers before making a recommendation to you. It’s really that easy, so if you want to know more about saving for your retirement then please contact us.
Has your employer not set up a pension scheme for you?
If your employer has not yet set up a pension scheme, then they may need help too, so please pass our details on as we specialise in setting up and servicing Workplace Pension schemes.
Personal pensions, in one guise or another, have been around for well over 40 years
The early plans were more likely to carry a guarantee or two but they were also probably more expensive to operate than their modern day counterparts. In addition, many of the older legacy pensions were and still are less flexible than more recent plans and often do not allow for some of the options permitted by today’s pension rules.
For these reasons and others besides, people sometimes wonder whether they should keep their older pensions or transfer them into a later version that has more bells and whistles.
But changing your pension is not like changing your car or upgrading your mobile phone! You probably need advice and you need it from a suitably qualified financial adviser.
Understanding your financial circumstances and objectives
Here at Cansquared we will aim to understand your financial circumstances and, most importantly, listen to your specific objectives, assuming you have some; that’s what you’re actually trying to achieve, in this case with regard to your retirement planning.
If you want us to make a recommendation about your existing pension plan(s), then we’ll need your authority to obtain the information we require from the current provider(s). Once we have this, we’ll research any suitable pension companies and see if there’s a more appropriate plan for your circumstances and objectives. We even use some clever software that makes a comparison between your existing plan and any ones we think may be a possible alternative.
Also, before we make any recommendations regarding your existing pension or a potential replacement, we would aim to establish what is known as your Investor Risk Profile; in other words, what level of risk you can afford or are prepared to take in order to achieve your investment goals.
We would do this with the help of a simple questionnaire, which we would explain to you in greater detail at the appropriate time.
One thing we won’t do is recommend a transfer in every case
If our research suggests that your current plan is still suitable for you, then we will tell you so and explain why. Here’s a list of just some of the features of a plan that we would take into account when considering a pension we’ve been asked to review;
• Type of plan – whether it’s a personal or company based plan
• Date of commencement – this can give some clues about the likely features, benefits and costs.
• Fund value and Transfer value – this will tell us if there are any penalties on transfer
• Fund selection – the fund(s) you’re invested in and how much risk they carry
• Any guarantees or other specific benefits – for example, old plans may contain a guaranteed annuity option.
So as you can see, transferring a pension is not a straightforward exercise; great care should be taken by you and must be taken by a fully qualified adviser.
Pension Freedom at Retirement
Are you over 55 years of age and starting to think about retirement?
If not, then maybe you would at least like to understand what your options are and when you can get your hands on that hard-earned cash that you’ve been paying into your pension for all those years!
Pension changes that give you the advantage
Pensions, of course, are essentially designed to provide an income in retirement, traditionally when you no longer need to raise yourself from your early morning slumber and skip joyfully off to work!
However, the clear dividing line between work and retirement has been blurring for some years now as an increasing number of people, given the option, have been able to make a more gradual transition.
Winding down work and phasing in retirement has grown in popularity in the last few years, particularly as recent government laws have taken a stance against age and sex discrimination. Your employer can’t simply push you out of the door now just because you’ve reached your designated State Pension age.
To aid this change even further, the pensions world has continued to evolve and in April 2015 new rules were introduced that offer greater choice and flexibility regarding when and how people can access their money.
So what are your options?
How do you know what’s best for you and what are the implications of certain actions?
You can get some free and impartial support from the Money Advice Service, which is an independent organisation set up and backed by government. Their website provides lots of useful information – www.moneyadviceservice.org.uk
You can also obtain free guidance about your pension options from Pension Wise, another impartial service backed by government. Please take a look at their website www.pensionwise.gov.uk for further information.
Pension Wise will help you understand your options for taking your pension, but they will not give you advice based on your own specific circumstances. If you need personal advice, that’s where Cansquared can help.
We will explain the new rules and particularly any tax benefits or consequences. We will also try to understand your own specific objectives and aim to establish your attitude towards investment risk with the help of a simple questionnaire.
We will certainly need to know about your current pension(s) so we’ll also need your authority to obtain the information we require from your pension provider(s). Once we have this, we’ll research any suitable pension companies and advise on the most appropriate solution for your circumstances and objectives. This may involve recommending a new plan, particularly if your current plans are old and do not allow for the full flexibility offered by the new rules.
Please Be Aware:
- ‘The value of investments and the income from them can fall as well as rise and past performance is not a guide to future performance’
- ‘You may get back less than you invested as investment returns are not guaranteed’
Cansquared Limited is authorised and regulated by the Financial Conduct Authority. FRN 927062. Cansquared Limited is registered in England and Wales No. 8452816. Registered office: 24 Old Mill Ridge, Wadsworth, Hebden Bridge, West Yorkshire HX7 8RT