Will the pension reforms have an effect on retirement planning?

Just under a third (30%) of people believe the recent pension reforms will affect their plans for retirement income. Responding to a Schroders survey, of the people who said pension reforms will affect retirement, a significant proportion (45%) said they are likely to consider taking some money as cash and putting the balance in an investment fund.

Cash is king
Another plan is to invest in an income fund, and 23% said they are looking to keep the money in cash. 29% are planning to put the money towards a luxury purchase, such as a dream holiday, and 28% said they would use the money to pay off their or their family’s debts[1].

Understanding the changes
The remaining 70% who did not think the reforms will affect their retirement income planning gave varied reasons for this. 20% said this was due to worrying about taxation issues, and 31% said it was down to not knowing what decisions to make and not fully understanding the changes. 11% admitted they didn’t have a pension.

Source data:
Part of the Schroders Global Investment Trends Survey 2015, 1,000 UK investors surveyed (2 June 2015). [1] Respondents could give more than one answer.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.

Divorcees may need to take action to protect benefits following pension reforms

An unintended consequence of the pension reforms is that any divorcee with a pension earmarking order may need to act fast to protect their benefits. Any earmarking order that provides the ex-spouse with a fixed percentage of the pension income in retirement should be checked to ensure benefits are protected now that the member no longer needs to take their pension as an income and can instead take all the cash out as a lump sum.

More than one in ten would use parents’ pension on mortgage deposit

More than one in ten (12%) 20-35 year olds are prepared to ask their parents to access pension savings to help pay for a mortgage deposit, research from Old Mutual Wealth[1] shows. But only half as many over 55s are willing to use their pension to help children or grandchildren buy a home.

Two-thirds of people aged 55 and over believe financial advice should be compulsory at retirement

Two-thirds (65%) of people aged 55 and over who are not yet retired believe that it should be compulsory to receive financial advice at retirement according to findings from Retirement Advantage.

It’s never been more important to plan whom you’d like to inherit them

Your pension is your life savings you’ve built up to give you the retirement you want. Since new pension rules came into effect from 6 April this year, pensions have become more flexible – including a cut in tax when a pension is passed on.

How to give them a financial head start in life as they grow up in the modern world

Anyone with children knows there will be lots of demands on the household finances, but when it comes to long-term saving, perhaps for university or a first home, even a small sum can give your child a financial head start in life over a long period of time. With this in mind, the Association of Investment Companies (AIC) has taken a look at long-term investment company performance, and what to consider when investing for children.

Over-50s retrain for later life retirement funding

Nearly two thirds of over-50s workers would consider retraining so they could work longer in retirement, research from MetLife[1] shows.

Funding a post-work life will be difficult without sufficient planning

A new report has revealed a huge gender disparity when it comes to pension savings and income, indicating that funding retirement is likely to be a significant challenge for many women.

In his final Budget speech to parliament on 18 March, the Chancellor of the Exchequer, George Osborne, announced that Britain was ‘walking tall again’ after five years of austerity.

Estimating how much liability you could leave behind for your loved ones

Usually the ‘executor’ of the Will or the ‘administrator’ of the estate pays Inheritance Tax using funds from the estate.

The picture of retirement income in the UK is not as bleak as some would like us to think

A report has revealed those approaching retirement are expecting to receive £23,700 per year when they retire. The same survey shows that the average income in retirement today is currently just £19,000 – a shortfall of £4,700 per year, or 25%.

Two thirds of over-50s plan to lengthen their working lives

Nearly two thirds of over-50s workers would consider retraining so they could work longer in retirement, according to new research from MetLife.

Positive impact on earnings, and a small positive impact on dividends

Despite the so far rather negative response of equity markets, the oil price falls could be seen as a ‘shot in the arm’ for oil consuming economies, with many viewing the oil price decline as being deeply beneficial because it amounts to a reduction in input costs and a dividend to consumers.

Spotlight firmly on people rolling over into the holding provider’s own annuity

The Financial Conduct Authority’s (FCA) thematic review into annuity purchases has shone the spotlight firmly on people rolling over into the holding provider’s own annuity.

Almost 1 in 5 women are now the main household breadwinner

Nearly one in five (17%) of women claim to be the main breadwinner in their relationship, according to new research commissioned by Scottish Widows to mark its 200th anniversary.