Whenever I begin to advise a client on their retirement planning it is important that I fully understand their current circumstances.  This often involves dealing with various historic pension funds and benefits all (hopefully) packaged together in a tidy manner for me. However, there is always one ommission and that is details of the State Pension.

The State Pension is the foundation block of your retirement plans.  Whether it forms the majority or minority of potential retirement income it is still valuable.  It can vary quite significantly based on your level of earnings and your employment status (employed, self employed, not employed etc).  I’ve seen State Pensions for this year vary from £91 per week to £164 per week.

Also, you may have noticed a lot of press about State Pensions and extending the retirement age from when you can draw your pension.  This bad news is offset by the return of the link between the State Pension yearly increases and earnings increases.

If you would like to find out the details of your own State Pension then you can request a forecast online here for free.  It will tell you what you have built up so far, when you forecasted State Pension age is and how many more years of contributiong you need to do in order to get the maximum basic pension is.  It will also confirm if you have any entitlement to The Graduated Pension Scheme, SERPS or the more newer State Second Pension (S2P).  It’s only 4 pages long and iit is something you should read well before you plan to retire. 

If you would like any advice on State pensions or your retirement planning then please get it touch.

At last!  Safeguarded Rights are now only a distant memory in the world of pensions.  This badly thought out and inappropriatley named type of pension fund is now to be brought in line with the rest of Contracted Out pensions funds.

The Pensions Act 2008 (Abolition of Safeguarded Rights) (Consequential) Order 2009 (SI 2009/598) removes references in pensions secondary legislation to safeguarded rights – eleven SIs in total are modified. Safeguarded rights arise when a member’s rights in an occupational or personal pension scheme which is contracted-out of the state second pension are shared on divorce or dissolution of a civil partnership. PA 2008 s.100 and the related repeals in Schedule 11 Part 2 abolish safeguarded rights altogether with effect from 6 April 2009. From that date, shared rights that derive from contracted-out rights will be treated in the same way as other shared rights.

And the best news is that if you are a policy holder who owned a Safeguarded Rights fund or were about to receive such a pension fund through your divorce then you are now able to take 25% of the fund as a tax free cash lump sum.  Thi sis subject to the normal rules surrounding all pension such has a earliest retirement age of 50.

Call me now if you want to discuss your Safeguarded RIghts in more detail.

What a disaster this is turning out to be.   I speak as an investor, adviser and shareholder. Clients have lost money, advisers feel misled, shareholders worry about management and Standard Life ask for…..patience!!

Forget patience.  If this company was still a mutual organisation (owned by its policyholders) I don’t think it would have ever gone down the route of chasing a fast buck at the beck and call of investors.  And, even it had, I think it would have used its own funds to clean up the mess and financial loss of its wrong decisions and pay a lower bonus to with profit policyholders.

As a result of the wrong decisions I expect no winners.  Clients won’t want to put new money in an organisation whose cash fund loses value,  advisers won’t recommend a company that does not treat its customers fairly and investors will subsequently sell their shares in a less profitable organisation.

So is this goodbye to Standard Life or merely au revior until it changes it decision.  Over to you Mr Crombie.

So you are reaching your intended retirement age and you are beginning to receive your maturity options from your various pension providers.  What do you do now?  How do you decide on which style of annuity is best for you.  Level in payment or increasing?  A spouses pension or single life? Take the tax free cash or not?  Or even is buying an annuity the best way for you to provide income in retirement?

For the purpose of this article, lets assume that a single life, escalating annuity is best for you.  The next part of our advice process now involves finding which Pension Provider is going to offer you the highest income for your fund.  This ability to shop around for the best annuity rate is called The Open Market Option. 

The Pension Providers base their annuity rates on their own experiences of average life expectancy.  Don’t be fooled by there warm brochures covered with pictures of a happy pensioners.  They want you to die prematurely so they don’t have to pay your annuity out for long.   In fact, a number of Pension Companies will now offer enhanced annuity rates for smokers and retirees who have serious medical conditions such as high blood pressure, historical heart attacks, diabetics etc.

We don’t advocate you start smoking just before you retire but if you do, or you take medication, then contact us to see how much extra pension income you might get. 

You only get one chance to buy your annuity so make sure you contact us to get the correct advice on both style of annuity and the Pension Provider offering the highest rate.  

Then all you have to do is live a long and happy retirement!