Pension Page

Divorce and Finances

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Protecting your assets and preparing you for going forward on your own.

Divorce involves many loose ends, both emotional and financial. It can generate high levels of uncertainty and financial stress, as it impacts on all areas of your life, from living arrangements to assets and pensions. That’s why financial planning through a divorce is essential to help protect your assets and prepare you for going forward on your own.

Making the right financial decisions during your divorce can be difficult. You may be worried about your future and how you will support yourself and your family. Divorce is a difficult time emotionally and financially. It is important to obtain professional financial advice to help you through this challenging period.

This will help protect your interests, ensuring that you receive a fair outcome and your future is secure. It will also enable you to have a clear understanding of your current financial situation. This includes knowing what assets and debts you have, as well as what income and expenses you have each month.

Future finances

You’ll need to be realistic about your future income and expenses. That means putting a realistic budget in place so that you can make informed decisions about your future finances.

Don’t overlook any tax implications based on any financial decisions you make. This is especially important if you are considering selling assets or transferring property.

Dividing pensions in divorce

One of the most important assets to consider is your pension. Pensions are often overlooked in divorce settlements, but they can be worth a significant amount of money. It is important to get professional advice to make sure that pensions are taken into account in any settlement.

There are several options for dividing pensions in a divorce, and the best option will depend on your individual circumstances. You may be able to keep your pension in its current form, or you may need to transfer some or all of it to your ex-partner.

Divorce settlement

Whatever you do, make sure that you obtain professional advice before making any decisions about your pension. It is one of the most important financial assets you have, and you need to make sure that it is taken care of in your divorce settlement.

With careful planning and communication, you can make the transition as smooth as possible to help you move on with your life and make a fresh start.

5 top tips when it comes to finances and divorce

  1. Get organised

Gather your financial documents to help you and your lawyer understand your financial situation and make the best decisions.

  1. Make a budget

Be honest with yourself about your income and expenses. This will help you make informed decisions about your finances going forward.

  1. Understand your rights

Speak with a lawyer to understand your rights and responsibilities during the divorce process. This will help you make decisions that are in your best interests.

  1. Communicate with your spouse

If you have children, it is important to communicate with your spouse about financial matters. This can be difficult, but it is important to try to reach an agreement on child support and other financial issues.

  1. Obtain professional financial advice

This will help ensure that you are making sound decisions with your finances during this difficult time. There are many factors to consider when going through a divorce. The advice will help you understand the financial implications of the decisions you make, and provide guidance on how best to protect your interests.

If you have any questions about your pension or other financial assets during a divorce, please contact us.

Important information: Divorce settlements are not regulated by the financial conduct authority.

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Preparing for retirement

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Preparing for retirement

Here are the top four things you can do to prepare for retirement:

1. Prepare a budget

One of the most important things you can do is to create a realistic budget that will help you track your expenses and income. This will allow you to identify any areas where you can cut back and save more money for retirement. By tracking your spending and income, you can create a plan that helps you save for a comfortable retirement.

2. Consider pension decumulation options

As you approach retirement age, it’s essential to explore the various ways you can convert your pension savings into a retirement income. There are several options available, such as annuities, income drawdown and immediate vesting personal pensions. Seeking professional financial advice will help you understand your options better and make informed decisions about how to access your pension.

3. Review your asset allocation

As retirement approaches, it’s essential to reduce exposure to higher-risk assets such as equities. By reviewing your asset allocation, you can adjust your investments to make sure you have a well-diversified portfolio that is designed to provide steady income for your retirement years.

4. Review your retirement plan regularly

Regularly reviewing your progress is crucial to ensure you are ready for retirement and make the necessary adjustments if needed. Changes in your income, expenses or the financial climate may require you to adjust your plan. By following these four tips, you can set yourself on a path to financial security for your retirement years.

Seek professional financial advice

By planning ahead and taking the necessary steps, we can help you build a robust retirement plan. To tell us about your retirement planning goals and discover how we can help you, please book a chat. Alternatively, watch our video on “the benefits of financial advice when planning retirement“.

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6 ways women could boost their pension pots

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6 ways women could boost their pension pots

  1. Contribute as much as you can to your pension – and start early
  2. Check the charges on your pots & see if consolidating will bring them down
  3. Check the amount of your State Pension & plan how you’ll cover any shortfall
  4. Put more into your pension when you get a pay rise
  5. Talk through your pension planning with your partner
  6. Keep a regular eye on your pension to ensure you’re in full control

For more information on the gender pension gap, read our latest article “The Gender Pension Gap Issue“. Alternatively, if you would like to speak to one of our Financial Advisors about the pension planning services we offer, then please get in touch.

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How much of my pension can I take tax-free?

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Many over-55s are unaware that they can access 25% of their pension pot tax-free.

A surprising 43% of individuals over 55 need to be made aware that they can withdraw 25% of their pension pot tax-free, according to recent research[1]. Knowledge could lead to better decision making when it comes to accessing pension savings.

Similarly, 52% of those surveyed between the ages of 50 and 54 were also unaware of this rule, indicating a widespread lack of understanding about pension withdrawal options.

We answer the important questions regarding tax-free pension withdrawals.

How much can I withdraw from my pension tax-free?

Typically, most people can withdraw 25% of their total pension pot tax-free, although this may vary depending on the type of pension plan and if you’ve exceeded your lifetime allowance. The remaining 75% is subject to Income Tax when withdrawn.

When can I take my tax-free lump sum?

Generally, you can access your pension savings, including the tax-free lump sum, at age 55 (rising to 57 in 2028). In rare cases, you may be able to access your pension earlier due to ill health or a protected scheme.

Can I take my lump sum in smaller amounts?

This depends on your pension product and its terms. Taking smaller withdrawals over time can be beneficial in most cases, as it allows for potential growth and tax-efficiency.

Should I take my lump sum immediately?

It’s essential to consider the longevity of your pension savings throughout retirement. Taking too much too soon could result in running out of funds later in life. Delaying access to your savings may allow for additional growth.

Are there any implications to be aware of?

Accessing your pension savings can impact state benefits, such as Universal Credit or Pension Credit. Additionally, taking a tax-free lump sum won’t affect the amount you can contribute to your pension plan, but accessing taxable income may reduce your annual allowance.

Professional financial advice

Understanding your pension withdrawal options and seeking professional financial advice will help you make informed decisions and maximise your retirement savings. To learn more about how we can help you, please contact us today.

Source data: [1] Opinium conducted research among 2,000 UK adults aged 18+ between 12″16 May 2023 for Standard Life, part of Phoenix Group. Results have been weighted to be nationally representative.

Important information: A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the 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.

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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.

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What is 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.

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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.

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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.

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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.

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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.

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