The result will be a significant reduction in the amount of paperwork you receive annually and a better pension solution. A pension switch or transfer to simplify and align your plans could save you thousands of pounds while reducing the overall investment risk.
Modern day personal pension plans are simple to understand, useful and very tax efficient structures that can be used to save up money far more quickly that non-incentivised structures, due to the extra inputs from HMRC.
Pensions remain one of the most tax-efficient but most complex ways to save. You no longer have to save in old insurance company schemes with potential high charges and poor investment and fund choice.
We now have far more flexibility to use the ‘pension rules’ to your advantage. We can now use a ‘pension wrapper’ to hold a portfolio of investments which is then sheltered from tax allowing these funds to grow extremely efficiently.
Regardless of the medium used to accumulate the savings, careful planning to ensure that you are saving enough on a monthly or annual basis is critical. Regular reviews to assess investment returns, inflation, charges, annuity rates and volatility are paramount to keep target retirement income on track.
Defined Benefit or Final Salary Pension Schemes carry certain guarantees and benefits that are almost impossible to replicate in the personal pension environment. Such contracts should only be transferred in very rare situations as doing so will almost always result in a worse outcome for the individual.
These valuable employer sponsored pension schemes guarantee a level of increasing retirement income for the member, whereas the income available from personal pensions (PPS) and occupational defined contribution (DC) schemes is a direct result of how the individual manages the investment returns and charges over the term.
Clifford Osborne are Independent Financial Advisors (IFA’s) based in Eastbourne, East Sussex, and serve clients in Eastbourne, Lewes, Seaford, Bexhill, Hastings, Newhaven, Crowborough, Uckfield, Tunbridge Wells, Brighton and Hove Please contact us if you would like to know more about pension consolidation.