With a number of changes being made to the way state pensions work, it has never been more important to review your plan to retirement and understand your pension position.
Most people do not have any idea of the income they will require once they have retired and the majority of people don’t fully understand how to calculate this in relation to the lifestyle they want to lead once they have retired.
A survey conducted by financial company Mintel found that 39% of Brits believe they will not be able to afford to retire.
The survey found many regional differences with up to 45% of people within London believing that they would never fully retire.
However 32% of people said they would plan to retire as soon as they were able to claim the state pension.
But, with changes to the state pension have people really got an understanding of what retirement holds for them?
As of April 2016 the new state pension will provide 155.65 a week in full, however, not everyone will be eligible for the full payment. This will depend on your national insurance record; you have to have a minimum of 10 years to receive any payments and 35 years or over to receive the full payment.
The Government qualify a year as you working and receiving 155 per week from one employer or if you are self-employed and are paying national insurance. There are some exceptions to the rule so it is always important to check your circumstance. https://www.gov.uk/check-state-pension
Some exceptions include if your pay is between 122-155 per week, if you can’t work through illness or disability, if you are a carer, if you are claiming child benefit for a child under 12.Finally if you are unemployed and claiming job seekers allowance or employment and support allowance.
With these changes it has never been more important to evaluate your personal plan to retirement. Do you currently have any private pension funds in place? When was the last time you reviewed your pension fund if you have? Is it working hard enough to make your retirement what you want it to be?
It may be that you have an end of salary agreement with your employer but you are unaware of changes in legislation meaning, if your employer agrees, rather than have a fixed sum paid annually you may be eligible to “transfer” your pension in to a private fund with an agreed figure by your employer.
It is worth noting that in April 2016 the lifetime allowance changed to 1 million.
Whatever your circumstances it has never been more important to take charge of your future and retirement by planning to retire and taking independent financial advice;
We offer a FREE initial pensions review that will help you understand what your retirement look like currently and could help you plan for the retirement you actually want.
It may be you do not currently have a pension plan and are interested in creating one, you may already have one or more pensions in place but are not sure or happy how they are performing.
We can offer specialist tailored pension advice in Doncaster and around the UK offering specialist pension advice tailored to your specific needs and will conduct a full financial review and assess if your current pension plan will allow you to have the retirement you desire.