Pensions
What is a pension plan and how would it work for you?

A pension allows you to save money in a tax efficient way which will provide you an income in your retirement. It’s one of the best ways to grow your money steadily over time.

A pension allows you to save money in a tax efficient way which will provide you an income in your retirement. It’s one of the best ways to grow your money steadily over time.
There are many types of pensions depending on the type of policy you have, you, your employer, your spouse or even children can all contribute to it. You will also receive benefits from the government in a form of “tax relief”. The pension pot will include any capital growth earned from the investments within the plan depending on how the scheme was set up.
Pension pots do not include your “State Pension” as this is provided by the government.

You can contribute to as many pensions as you like this will depend on what you can afford and how much you would like to put aside for when you are older. There are however restrictions each tax year on pension contributions as well as over your lifetime. 
A pension is considered as a long term savings plan where you would save a portion of your income regularly over your working life to provide you with an income later in life. 

Pension schemes are made up of many types some run by employers others you can setup yourself. 
In 2015 some of these pensions became more flexible providing early access to some of the benefits when you reached the age of 55, taking as little or as much as you wished, when ever you liked. With this type of flexibility many advisers would recommend cation as there are tax’s that you should be aware of before making any withdrawal from a pension.

It is important to understand how saving for a pension affects your income as you will be giving up disposable income now in exchange for greater financial security later in life. Budgeting is a key component to effectively planning your pension, helping to forecast what income you need and want in retirement.
Is having a pension really worth it?
Is having a pension really worth it?
As you get older you tend to start to work less but would still need to receive an income to live on. The earlier you start planning for this, the more potential there is to save a larger fund for a better lifestyle in retirement.
An advantage comes in the form of tax relief on the payments you make to your pension pot. Contributions of 20% are added by the government up to a certain limit. For higher earners additional savings can be claimed via a tax return form. With workplace pensions employers are legally obliged to contribute to your pot and this also receives government tax relief. Pension investments are free from income tax and capital gains tax. No tax will be paid on dividends from shares or capital gains tax on investment profits. You will however need to consider tax implications when you start to withdraw from your pension plans.
Explaining the three main types of pensions in the UK
Defined contributions pension - Also known as “money purchase” pensions. This can be a personal pension arranged by you or an employer. Money paid in is invested, the size of the pension will depend on how much was invested and the level of growth from the investments.
Defined benefit pension  - Also known as “final salary” or “career average“ pensions. Arranged by your employer the pension you receive depends on the amount you earn, the length of time you have paid into it and the terms of the individual pension scheme. These schemes guarantee a certain amount for you to receive each year when you retire.
State Pension - A pension you receive from the government when reaching state pension age. The amount you receive is based on National Insurance contributions. At present the maximum you can receive is £164.45 per week, changes can be checked by visiting www.gov.uk
Getting tax relief on your annual pension contributions

For UK tax payers the standard rule for 2019-20 you will receive tax relief on 100% of your earnings or a £40,000 annual allowance.

Getting tax relief on your annual pension contributions

For UK tax payers the standard rule for 2019-20 you will receive tax relief on 100% of your earnings or a £40,000 annual allowance.
How are each of the pension options taxed?

  • Leaving your pot untouched no tax is applied.
  •  Guaranteed income (Annuity) 25% tax free of your pot, then taxed on income from the annuity
  • Take cash lump sum 25% tax free - 75% taxed of amount you take.
  • Take whole pot 25% tax free - 75% taxed on the whole pot. 
  • Adjustable income 25% tax free before investing adjustable income, taxed on income you get from your investment. 
  • It is possible to create a mixed solution suited to your needs.
Building up a pensions “Lifetime allowance”. 

A life time allowance puts a limit on the pension benefits you can draw from without having to pay tax charges. For 2019-20 the Lifetime allowance is £1,055,000. A tax of 25% would be charged above this limit if paid as income or 55% if this is paid as a lump
When taking money from your pensions 25% is tax free and you would pay 75% on the remaining amount. This does not use any of your “Personal Allowance” at present this is £12,500 per annum. The tax you pay will depend on your total income for the year and your tax rate.

Two ways you can take your taxfree amount either as a lump sum or in smaller chunks. You must either then buy an annuity guaranteed income, get an adjustable income flexi-access drawdown, or take the whole pot as cash.
Transferring your pension
Factors that are considered when looking at a possible pension transfer:

  • Your current provider does not offer options to contribute or the options required to grow a plan. 
  • You want to combine plans into one simple pot. 
  • You want to pay less in fees. 
  • You require earlier access to your pension than the current provider can offer for example ill health. 
  • You require a higher income return from your pension.
Having financial advice can ultimately help you decide if a transfer is right for you. Regulated advisers are able to run pension forecasts and understand what it is you are trying to achieve. Any fee’s and projections will be mapped out clearly and whole of market searches can be made on your behalf to find the most relevant providers.
Considering Combing pension pots

You may have worked in several places or contributed to lots of different plans. Combining policies can make managing these a lot easier, reduce costs and maximise potential growth.
Transfer Valuations & Fees


A transfer value is the worth amount if the pension was to move. Fees may apply like an early exit charge when transferring a pension. You may also be giving up some of the benefits in a current plan held.
Regulated Pension Advice


A regulated qualified financial adviser can help you ultimately decide what is right for you. They can explain any fee’s associated and search the whole market ensuring recommendations made are in your best interest.
Accessing your pension

Within your pension there will be the certain minimum age you can access your plan in general this is age 55 however this can vary. When obtaining scheme information this will be part of the questions made to enable a full analysis of current arrangements.
A guide to our Pension Review

Our initial review begins with an information gathering exercise where we compile an in depth look into your need's and requirements this is entirely at our expense. Our regulated advisers will then evaluate your current positions and compile a comprehensive report, tailored to your needs. This will ensure the recommendations are inline with your attitude to risk as well as achieving personal goals.

At this stage we would have completed all the necessary details we require to get you the correct advice. Our regulated experts will put your needs at the forefront of our recommendations ensuring they have tailored them to achieve all goals and future projections. Any costs involved to proceed will be clearly explained, it is then entirely down to you to ultimately decide whether you wish to proceed with this recommendation.
Arrange a Consultation

The first meeting is always at our expense so you can be comfortable in knowing that it will cost you nothing to see if our services are right for you.

Our Financial Experts

Our team of advisers are highly trained and qualified, with specialties in all different fields of financial planning particularly in pensions and investments.

High Expectations

Strive for the top and you’ll reach it. That’s our motto, and our experience. We’ll work our hardest so that your most challenging goals are met every time.
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