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Pension help, advice and guide

Welcome to the pension advice page. Here we will be able to provide you with all of the help and advice you need related to your pension, whether you have an existing pension or are looking to start one. We also offer a range of useful guides to give you more information about pensions, which you can find below.

What is a pension?

A pension plan is essentially a savings scheme that provides you with a regular income once you reach retirement. You can take a portion of the plan as a lump sum upon your retirement, and the rest will be paid to you at regular intervals.

Most people will qualify for a state pension when they retire. The current (2013/14) single person’s entitlement is £110.15 per week, so you can see that won’t go far towards maintaining the standard of living you’d perhaps like.

That’s why it makes sense to also contribute to a private pension plan that will provide you with an additional income to enable you to fully enjoy your retirement.

Types of pension

Although there are many types of pension, the most common are as follows:

1. Personal / Occupational
2. Stakeholder
3. Self-invested personal pension (SIPP)
4. State

Each pension scheme offers the added benefit of tax relief. This means that the pension provider can claim back income tax at a rate of 20pc on any pension contributions made. In essence this means for every £100 paid into your pension, it will only cost you £80 net. Your pension will grow largely tax-free and when you finally come to take your pension benefits you can usually take up to 25% of the total fund as a tax-free lump sum.

Pensions are a product that can be confusing, and you are likely to have many questions, so it is recommended you get professional pension advice prior to deciding which type of plan is best for you.

Do I need a pension?

The simple answer is yes. By saving regularly in a pension plan you can make sure that when the time comes for you to retire you have sufficient funds to provide a monthly income that will allow you to maintain the sort of lifestyle you would wish for.

Most people will qualify for a state pension when they retire. On average the current retirement age is 65 years old.

How do I get a pension?

Due to the nature of pensions, setting up a plan will usually require professional help and advice. You can set up a pension at any time whether you’re employed, self employed or unemployed. The two main ways include:

1. Joining a workplace pension scheme
2. Speaking to a Financial Advisor

Remember, you are never too young to start contributing towards your retirement, and the earlier you start to save the higher your savings potential will be.

When can I cash my pension?

In his March 2014 Budget speech, the Chancellor George Osborne announced major changes to pensions and how you can cash it.

Whilst the age at which you can start receiving your pension benefits remains at 55-75, there have been some changes to how you can receive your benefits.

These changes have made pensions more flexible, allowing you to have greater access and control over what you do with your savings when you do retire.

You will now have the choice to withdraw up to your entire savings from your pension at the age of 55 instead of being forced into buying an annuity. However, it should be noted that only the first 25% of your pension fund can be taken as a Tax-Free Lump Sum, with anything after that being classed as a taxable income.

Pensions and divorce

With one in three marriages ending in divorce and more than four million divorcees in the UK, the question of what happens to a pension during divorce proceedings has become an increasing area of concern.

There are three main options that a divorce court may choose to follow:
1. Offsetting
2. Ear marking
3. Pension sharing order

If this is of concern to you then you may want to speak to a financial advisor in order to better understand your position.

Pension help and advice for you

As we have discovered, pension schemes are complicated products. They are also extremely important, and for most people will be second to their mortgage as the biggest financial commitment they ever make.

For these reasons we believe is vitally important to get professional financial advice before you make any big decisions regarding your pension. The service we offer will put you in touch with the right people and will even provide you with a free answer to any questions you have regarding your pension.

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