Pensions

7 Benefits of Financial Planning

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7 Benefits of Financial Advice

Whether you want your money to work harder or if you are approaching retirement and want to make informed decisions about your pension options we will offer expert, qualified advice at every stage of your journey.

  • To help you build your assets
  • To help you achieve your financial goals
  • To plan the right investment strategy for you
  • To help you tax plan efficiently
  • To help you plan for retirement
  • To protect you and your family
  • To give you financial peace of mind

We will work together with you to create a holistic, comprehensive financial plan to achieve your goals. Please get in touch with us for more information.

Financial Freedom

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Professional financial advice matters by helping you make informed decisions about how to best allocate your resources.

Financial planning is a crucial step towards achieving financial freedom and security. By taking the time to thoroughly evaluate your needs and personal goals, you’ll be able to make informed decisions about how to best allocate your resources.

With a comprehensive professional financial plan in hand, you’ll have the confidence and peace of mind to pursue your short-term goals and work towards your long-term future. With professional guidance, you’ll be inspired to realise that you have far more resources at your disposal than you ever imagined.

Early retirement

According to a recent study, UK consumers who receive professional financial advice can expect to retire on average three years earlier than those who do not seek professional advice, with advised consumers planning for retirement at age 66 as opposed to non-advised consumers who expect to retire at 69[1].

This underlines the positive impact that professional financial advice can have on retirement preparations, with those who seek advice feeling better equipped for their later years. The study identified that twice as many people who seek financial advice create a detailed spending plan in retirement compared to those who don’t take advice, with 45% of advised people falling under this category as opposed to 18% of non-advised consumers.

Enjoying retirement

Financially advised consumers expect to fund their retirement for a longer period, with an average of 23 years, compared to 17 years for non-advised people before pertinent cutbacks must be made. In addition, the study reveals that financial planning tends to be beneficial for people already in retirement.

Almost all (96%) of wealthy retirees who did a great deal of financial planning or just planned their finances slightly say they’re enjoying their retirement, dropping to 72% among those who have done no financial planning.

How much do I need to retire

Regrets for non-advised retirees are more pronounced, with the majority stating that they require more money in retirement compared to their original estimates, and that they wished they had planned more thoroughly, compared to advised people.

Despite having a higher household income, 23% of wealthier pensioners, with an income of between £40,000 and £49,999, wished they had planned more thoroughly, indicating that the value of advice remains consistent regardless of income.

Retirement Planning Services

Planning for retirement can be overwhelming, leading to several considerations, making financial advice crucial for people to feel more confident and prepared about their future. The research results underscore the significant variation between the retirement plans and experiences of those who have taken advantage of financial advice and those who haven’t.

The research findings demonstrate the value of professional financial advice in terms of the retirement age and the enjoyment of one’s retired life. Start planning today, and take the first step towards a brighter tomorrow.

Financial Planning Services

Financial planning can certainly feel complicated at first glance, but with the right guidance, it can be a smooth and stress-free process. At every step of your financial planning journey, we’re dedicated to providing you with accessible financial advice to support you in making informed decisions about your finances.

Cash Flow Forecasting

Our Financial Advisers use sophisticated cash flow forecasting software which helps you to visualise your expenditure, income and preferred lifestyle. It also allows us to simulate different scenarios and stress test how much financial resilience you may have to factors outside of your control, such as life events, economic changes and volatile markets.

If you have any concerns about your financial future or would like to find out more, please contact us.

Source data: [1] Boxclever conducted research for Standard Life among 6,000 UK adults. Fieldwork was conducted between 6 Sept–16 October 2022. Data was weighted post-fieldwork to ensure the data remained nationally representative on key demographics. Comparisons to data from last year are taken from Boxclever research among 4,896 UK adults conducted between 16-23 July 2021.

Cost of living and retirement

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Cost of living and retirement

Over 2.5 million people aged 55+ think they will work beyond their state pension age.

  • 23% are uncertain of how long their retirement savings will last.
  • 18% admit to not having made preparations for when they stop working.
  • 45% worry their health will deteriorate as a result of continuing to work.
  • 35% are concerned their health will affect their ability to remain employed.
  • 16% are concerned about being treated differently because of their age.
  • 16% worry about not being able to spend enough time with their family.

If you are concerned about the cost of living and retirement then please get in touch to discuss how our retirement planning services can help you.

How to decide when to retire

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A couple sat working through their finances and pension planning

Over a third of over-55s think they will work beyond their state pension age.

We are witnessing a surge in the number of people giving retirement a second thought due to inflation rates and the cost of living crisis. Not only are more individuals looking to work beyond their State Pension age, but some are returning to employment after retiring due to increasing financial pressures.

Over 2.5 million people aged 55 and over will be impacted by the long-term effects of financial insecurity and think they will continue to work past their State Pension age. Additionally, half of those aged 55 and over don’t believe their pension is enough to fund their retirement, a survey has revealed[1].

Increasing cost of living

Nearly four in ten over-55s who are not retired anticipate having to work past their State Pension age due to the increasing cost of living. Financial concerns surrounding retirement funding are the top drivers behind working beyond State Pension age.

A quarter (23%) are uncertain of how long their retirement savings will last, and almost one-fifth (18%) admit to not having made any preparations for when they stop working.

Ability to remain employed

Nearly half (46%) of the millions of older workers expecting to work past their State Pension age are apprehensive that doing so will mean they can’t enjoy their later years.

Health, too, is another major concern, with nearly half (45%) worrying their health will deteriorate as a result of having to continue working and more than a third (35%) concerned it will affect their ability to remain employed.

Heavy financial strain

Worryingly, 16% are concerned about being treated differently or worse at work because of their age and the same number worried about not being able to spend enough time with their family due to work commitments.

Looking ahead, the older workforce is expected to be crucial to the UK’s economic recovery as it will help ease severe labour shortages, yet this warning sign points to heavy financial strain many are facing.

Cash flow forecasting

We all want to be in control of our retirement plans and feel confident we can stop working when we want to so that we can enjoy the retirement we deserve.

We use sophisticated cash flow forecasting software and together we can plan and analyse your financial goals, review how changing circumstances could impact this plan and to see how likely it is these financial goals can be achieved.

If you are worried about how your current situation and the cost of living could impact on your retirement savings, we are here to talk through your options. To find out more, please speak to us.

Important information: A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

Source data: [1] Survey conducted by Opinium among 2,000 UK adults between 21-25 October 2022.

State Pension boosting deadline extended to April 2025

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State Pension boosting deadline extended to April 2025

  • Ensure you are eligible to receive the full State Pension
  • Consider buying extra National Insurance Contributions. You have until April 2025. The standard cost for a week is £15.85
  • Check to see if you can receive the maximum amount of £203.85 (how much you will get depends on how many ‘qualifying’ NI years you have)
  • State Pension Forecast Calculator – check your NI payments record at https://www.gov.uk/check-state-pension

Get in touch with us today for independent financial advice on your retirement planning.

The deadline to top up missing National Insurance years has been extended

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Check you are entitled to full State Pension, the deadline has been extended for topping any missing National Insurance Contributions.

Chartered Financial Planner, Colin Welsh, discusses the increase to the State Pension, why it is an important part of retirement planning and how you can check what you are entitled to.

State Pension boosting deadline extended to April 2025

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Check you are entitled to full State Pension, deadline extended for topping any missing National Insurance Contributions.

The deadline to top up missing national insurance years between 2006 and 2016 has been extended to 5th April 2025, with the price of doing so remaining frozen at current costs during this period. This means that you will have more time to check your record and see if you can increase your State Pension when its time to claim.

Thanks to ‘transitional arrangements’ brought in when the new state pension system started in 2016, you have the opportunity to check your NI forecast and make any adjustments necessary.

Why NI years are important in calculating the amount of State Pension you will receive

The maximum amount of full State Pension you can receive as of April 2023 is £203.85 a week, but how much you will get depends on how many ‘qualifying’ NI years you have.

Many will likely need 35-40 qualifying NI years, and the ‘transitional arrangements’ mean you can pay extra contributions to plug any gaps in your NI record dating back to 2006.

If you are male and born after 5 April 1951 and female and born after 5 April 1953 you have until 5 April 2025 to buy additional contributions, after which you can only fill gaps going back six tax years.

If you were born before these dates, you have up to 6 years after you reach State Pension age to top up contributions and to increase your State Pension.

Step 1

If you have not yet reached state pension age, go to the State Pension Forecast Calculator to check out your NI payments record https://www.gov.uk/check-state-pension

Step 2

Consider buying extra contributions for any gaps showing on your record.

The standard cost of buying ‘Class 3’ National Insurance contributions is £15.85 for a week of missing contributions in the 2022-23 tax year. It would cost you £824.20 for an entire year.

If you are looking to fill gaps that occurred in the past two tax years, you would pay the rate from those years. Voluntary contributions for gaps in 2021-22 cost £15.40 per week, for gaps in 2020-21, the cost is £15.30 per week.

For those able to fill gaps between 2006 and 2016 (men born after 5 April 1951 and women born after 5 April 1953), the cost for a week is £15.40.

Step 3

Who should buy additional contributions?

If you are close to State Pension age and do not have enough qualifying years to get the full State Pension

If you know you are going to ‘run out of time’ during the remainder of your working life to be able to secure the necessary number of qualifying years to receive the full State Pension

If you are self-employed and don’t have to pay Class 2 contributions because you have low profits or live outside the UK, but you want to qualify

It is always important to seek qualified, independent financial advice when planning for your retirement or when trying to calculate your retirement income.

Why should someone invest in a retirement plan?

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Portrait of multiethnic couple embracing and looking at camera sitting on sofa.

Pensions may not be the most exciting thing to think about, but they are an essential part of planning for your long-term future. In fact, your pension has the potential to be one of your most valuable assets, even more than your property. It’s something that could make a significant difference to your lifestyle in later life.

When it comes to retirement planning, it’s best to start thinking ahead at least two years before you plan to stop working. To prepare for this next chapter in your life, our handy checklist can guide you through the important choices you’ll need to make to ensure you’re fully prepared for a comfortable retirement.

Today’s savers face unique challenges

Although retirement planning may seem familiar and straightforward, the truth is that today’s savers face unique challenges that previous generations did not encounter. While the basic concept of working, saving and retiring remains constant, there are new factors at play that can complicate one’s retirement savings efforts.

Planning for your retirement means carefully considering whether you will have enough funds to cover your desired lifestyle after you stop working. While you might be eligible for the State Pension, this might not be enough to sustain your retirement goals.

You may want to take early retirement

Additionally, you may want to retire earlier than the State Pension age, which requires additional savings planning to ensure you can afford the retirement lifestyle you envisioned. Careful planning and forward-thinking can ensure that you’ll have the financial security to enjoy your retirement without worrying about money matters.

There are many important things to keep in mind as your retirement approaches.

How can I locate all my pensions?

It’s crucial to determine how much income you’ll receive from all your pensions to properly plan your retirement. If you’ve misplaced any pensions over the years, you can use the UK government’s pension tracking service to locate them https://www.gov.uk/find-pension-contact-details

What is the value of my pension?

Keep track of your pension’s value regularly as retirement nears, ensuring that you’re aware of how much money you’ll have during your retirement phase.

When can I take my pension?

With a defined contribution pension, you can start taking money out from the age of 55, moving to 57 in 2028. However, it’s important to keep in mind that the earlier you start taking money out, the longer your pension will need to last. For those with a defined benefit pension, you can usually begin taking it from the age of 60 or 65. However, if you have a defined benefit pension, you might be able to start receiving an income from it from the age of 55. You may be able to take money out before this if you’re retiring early because of ill health.

How much State Pension will I get?

While it may not be your primary retirement income, it’s worth checking to ensure that you qualify for the full amount. You can quickly do this online through the government’s website https://www.gov.uk/check-state-pension

How much are my other investments worth?

If you have additional investments or savings, such as Individual Savings Accounts (ISAs), it’s important to check their worth as you approach your retirement age because they could supplement your pension.

How do I access my pension?

There are various ways to access your pension, including buying an annuity for guaranteed income, taking lump sums, or combining both. Your decision depends on your circumstances and what outcomes you expect.

What is my pensions investment strategy?

Take the time to analyse your investment approach as you approach your targeted retirement age and see if it still adheres to your risk tolerance. You could discuss potential strategies to reduce your exposure to higher risk investments over time with your financial advisor if you’re planning to receive a lump sum or purchase an annuity.

Seek professional financial advice

Accessing your pension is a critical decision that could impact your income and retirement significantly. That’s why it’s essential to seek professional financial advice before making any decisions.

Planning for retirement is not just about saving money. It’s also about envisioning your future and understanding your lifestyle priorities. By identifying your retirement goals and understanding your income needs, we can help you create a retirement plan that provides for your desired lifestyle and ensures your long-term financial stability. Don’t leave it to chance. Please contact us for more information on our pension planning services.

Important information: This article does not constitute tax or legal advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice. A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

Pension pot options

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What can I do with my pension pot?

  1. Leave it untouched for now and take the money later
  2. Receive a guaranteed income (annuity)
  3. Receive an adjustable income (flexi-access drawdown)
  4. Take cash in lump sums (drawdown)
  5. Cash in your whole pot in one go
  6. Mix your options

For more guidance on your pension planning options, please get in touch.

Flexi-access drawdown

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Financial Adviser, Andy King, discusses flexi-access drawdown.

Flexi-access drawdown is one of the pension fund options at retirement and can also be referred to as flexible retirement income, or flexible income drawdown.

Choosing the best way to use your pension fund is complicated so it is important to seek professional financial advice to help you understand your options and to make the best decisions for your hard earned pension pot.