Are there any gaps in your state pension contributions?

Enable’s IFA’s are keen to help anyone with their pension planning and despite the fact that a state pension may not be all you want to be relying on it is certainly a useful element of your retirement plan. But there have been changes in state pension provision and under the new “flat-rate” state pension you are required to have 35 years of full rate National Insurance contributions to receive the top rate, currently £155.65 a week.

It has recently come to light that thousands of people however would l not get the full amount if they have at some point been contracted out and paid a reduced rate of National Insurance. This set of circumstances is affecting s workplace “final salary” schemes and public sector workers such as teachers and nurses. But by filling in gaps in National Insurance records, you can dramatically boost state pension

But by making voluntary or “Class 3” lump sum payments you can fill in any missing years in your National Insurance record. It may mean you have to spend £4,000 to boost your state pension by £23,000 but hundreds of thousands of people are being urged to use a generous Government scheme to do just that. This guide published by Royal London, Britain’s biggest mutual company, explains how a single year of National Insurance can be purchased for around a lump sum of £733. This will boost state pension payments by around £230 a year for the rest of your life, totalling £4,600 in extra income over a typical 20-year retirement. Filing in five missing years using Class 3 contributions would cost you under £4,000 but generate nearly six times the outlay in extra state pension.

http://www.telegraph.co.uk/pensions-retirement/financial-planning/spend-4000-to-boost-your-state-pension-by-23000---heres-how/


Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

When can you draw your pension?

Making sure you have your pension in place is all part of the financial planning Enable’s IFA’s in Bishop’s Stortford like to offer.  Despite the recent confirmation of the triple lock on state pensions the government might still be preparing to increase the official state pension age to 70 for millions of people currently in their 20s. Documents produced by the Department for Work and Pensions (DWP)  indicating a “more aggressive” timetable on state pension age (SPA) increases than previously planned are being compiled according to  Steve Webb.

The current official SPA for people in their 20s is 68, though under the existing schedule it could be expected to rise to 69. The SPA is the youngest age someone can start receiving their state pension, and is due to rise to 66 between 2018 and 2020, to 67 between 2026 and 2028, and then to 68 between 2044 and 2046. Webb, a former pension’s minister who is now director of policy at mutual insurer Royal London, said: “The previous policy strikes a fair balance between expecting people to work longer and allowing people to enjoy a decent retirement.” “If the government is planning to force tens of millions of people to work to 68, 69 or even 70, then it should be transparent about its plans. This would be a huge shift and should be properly debated, not buried in a technical document seen only by specialists,” said Webb.

A DWP spokesperson said: “This work forms part of our research ahead of the first state pension age review. It’s important we have a clear understanding of how the current system is working for pensioners before we undertake the review.” If you want to make sure your pension is in place or encourage your children to put a pension in place Enable’s IFAs can help you look at the options.

https://www.theguardian.com/money/2016/nov/28/pension-age-may-be-about-to-rise-again-says-former-minister

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Passing on your pension

Making sure we have a pension in place for our later years is key to many financial plans and Enable’s IFA’s in Bishops Stortford like to help make sure you have a pension in place to meet your needs. Some of us are also concerned to be able to pass on a pension particularly to a partner but most pensions can actually be inherited by anyone when you die - and pensions can still be tax efficient where an inheritance liability is likely to apply to the owner's estate.

The way you take your pension however will affect how it can be used by your beneficiaries. If you have already purchased an annuity with your pension money typically meaning that you receive an income for life the death benefits will depend on the type of annuity you selected. If you choose a guaranteed period of payment, the annuity will continue to be paid for the agreed term even if you die before that. If you bought a "joint life" annuity, your spouse will continue to receive the payments at the chosen level until they die.

If you select a "capital protected annuity" or "value protected" annuity, your beneficiary will inherit a lump sum, your pot minus any annuity payments you took before you died. Pension cash which has not yet been spent on an annuity will remain outside of your estate for inheritance tax purposes.

As part of you financial planning you need to complete a nomination form with the pension company to specify who you would like to receive the benefits on your death and what proportion. Enable’s IFAs are happy to help with any pension planning.

Source: http://www.telegraph.co.uk/money/special-reports/how-can-i-ensure-my-family-gets-my-pension-when-i-die/

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

What will future pensions bring?

It would be hard to have missed that in April, there was a major overhaul of pensions, allowing people to take out some of their pension in cash. At Enable we did not see many people taking advantage of the new regulations. But if you took money out of your pension using the new "flexible access" provisions, your annual allowance will have been reduced to £10,000 not the £40,000 annual allowance you had before.

The current pension regime still gives tax relief when you put money into a pension and this pot grows largely tax-free.  You are only taxed when you take money out, apart from a 25% tax free lump sum. If your employer pays into the scheme, or funds a final salary pension, there is no employee or employer National Insurance Contributions (NICs) on the value of these payments or benefits. But among the Budget papers was s a consultation document which suggested further possible change that could mean replacing this long-standing system.


So instead of tax and NICs relief on contributions, pension saving would be made out of after-tax income, as with the Individual Savings Account (ISA) system. Then when the money was finally taken out, it would be tax-free. The Budget also announced the abolition of "pension input periods". It is really important to get your timings right to make the most of your pension. Enables IFAs in Bishop's Stortford can help you think through your options so that you can make the most of your pension savings in the future.



Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
 NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

How to leave your pension to someone else

Enable’s IFAs in Bishops Stortford have had lots of conversations with people about their pensions since all the changes this April. One thing many people don’t realise is that it has become easier to safeguard your pension for your heirs and you can now nominate anyone to inherit your remaining pension fund as a drawdown account with the right pension.

If you feel you have worked hard and saved all through your life so as to have a pension to provide enough to live on in retirement you will be delighted to realise that more of that fund can survive your death, providing an income or nest egg for your loved ones.  Even though pensions haven’t counted as part of an estate for inheritance tax purposes, until recently there has been a hefty 55% pensions death tax. Since this was thrown out earlier this year as part of the government’s “pensions revolution”, it has provided an enormous opportunity to leave some, or all, of your pension pot in a tax-efficient way.

Broadly speaking, if you die before the age of 75 your beneficiaries will pay no tax on any pension savings left to them. So the wealth you built up in a pension can be passed on as inheritance without losing the tax shelter or any tax charge. Only on your 75th birthday do your pension assets become taxable, but only at the marginal rate of income tax. You can nominate anyone to inherit your remaining pension fund as a drawdown account. This means beneficiaries can dip into the pension pot they inherit as and when they want. If you want to find out more about this Enable’s IFAs are happy to talk you though your pension options.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

What is a Personal Pension the basics?

A personal pension is exactly what it says on the tin and you can have one if you're employed but not in a company pension scheme, or you might want to have one in addition to a company pension. Or if you are self employed you may want to set up a personal pension or even if you are not working but can afford to put aside money for retirement you can have a personal pension.

You can pay a regular amount (usually monthly or annually), or a lump sum to the pension provider who will invest it on your behalf. The overall final value of your pension will depend on how much you have contributed over the years and how well the fund's investments have performed. Charges are made for setting up and running your pension and are normally deducted from your fund in the form of fund management charges.

The Annual Allowance for pension contributions is £40,000pa from 6 April 2014 this includes both employee and employer contributions. You can carry forward unused contributions from the previous three years (ie. back to 2011/2012 for 2014/15), potentially allowing contributions of up to £160,000 in a single year. HMRC has confirmed that you do not need to have made a contribution to a pension scheme in a year to be able to carry forward unused allowances – you simply need to have been a member.

For each pound you contribute to your scheme, the pension provider claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot. Enable’s IFA’s can help you decide if you want to set up a Personal pension.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

'Comfort' pension level is £15,000, says study

Enables IFA’s know that one of the hardest things to think about when you are young is saving for a pension.  But one of the surest things to do to make sure you have some savings for retirement is to start early.  A recent industry report suggests that when you are planning for retirement your should try and plan for an income of at least £15,000 a year.  It suggests that once people reach that income level, they begin to feel more comfortable and more financially secure and that that sense of wellbeing jumps significantly once retirees earn between £15,000 and £20,000 a year, including their state pension.

Interestingly enough the £15,000 contentment threshold seemed to apply however many people there are in the household.  A report like this really does help give a much more clear idea of how much people need to save for the very basics in pensions for retirement to top up state pensions.  The revised state pension is expected to be worth at least £7,500 a year when it comes in in April 2016.

Nest - a non-profit-making organisation which supplies pensions under automatic enrolement- has recently produced some tips for saving into a pension.  It claims that if a 30-year-old worker replaced a takeaway with a home-cooked meal at least once a week, they could save £12 a week.
If all of that was paid into a pension, it could build up to a pot worth more than £50,000.  Makes you think about what you might be frittering away if you want to start planning for your pension early Enable’s IFA’s are here to help.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

The reality of Buy to Let for your pension

There has been much talk of how with access to their pension pots people turning 55 are going to cash in their pensions and buy into property forever changing the housing market.  But it really is time to bring that idea into perspective. 

Many like managing director of Mortgages at CHL, Bob Young says the impact on the property market has been “completely overblown”. “If you are 60 years old with a relatively small pot, (the average UK pension pot is £30 000) then are you really going to gamble it by buying a property?” he says.

Clearly the tax implications make withdrawing large amounts unattractive to most people. For example, if we took a 55-year-old earning £50,000 a year with a £200,000 pension pot they would be able to access £50,000 tax-free. Then from next April, they could access the rest but would need to pay 40 per cent income tax. If they withdrew £150,000 in one blow, their annual income would be £200,000 and liable for the top rate of tax.  It would cost £65,000 in income tax on their pension fund and they would only be left with £85,000.

 “When you step back and work through the tax implications, then why would you do it?” says Young. “If you buy a property at £150,000 then you need at least a £30,000 deposit and you are beginning to pay 25 per cent tax on it. It is simply not logical for most people.”  The tax implications for most simply do not add up if you want to discuss options for your pension our experienced Independent Financial Advisors at Enable of Bishop’s Stortford are here to help.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE