Planning your retirement

Enable’s IFAs in Bishop’s Stortford know that worries about pension provision can keep people awake at night but the best way is to face the situation and find out where you stand with your pension.

Before you worry too much or doing anything radical you need to take stock and see what provision you already have. Many people have a mixture of entitlements to the three main types of pension: one provided by the state which is based on your NI records. Under the new system which came into force in April 2016 the full state pension is worth £155 a week, which amounts to just over £8,000 a year. To receive this full amount you will need to have 35 years of NI payments, but you can top-up missing years and buy extra income. Some will also have a “final salary” plan (which is a guaranteed income based on your salary and length of service with a company) and then there is the “defined contribution” (which is a simple pot of savings but with no guarantees attached).

If you don’t know about all your possible pensions make a list of all the companies you have worked for to date and if you don’t know what the pension provisions were you can use the Government’s free Pension Tracing Service . Once you know what you have your investment strategy really depends on what you plan to do with your pension, you might want take the entire pot as cash, buy an annuity, or go into “drawdown” which drip feeds you cash leaving the lump sums to grow. Pension companies can tend to make broad assumptions, based on your age and other factors that might be at odds with your goals so make sure you get some good advice. Enables IFA’s in Bishops Stortford are always happy to talk through your pension plans with you.


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

http://www.telegraph.co.uk/pensions-retirement/financial-planning/five-steps-pension-perfection-2017/

Redefining retirement

If you are part of the younger generations the idea that retirement starts at 65, and will be a time of financial security and adventure might need reviewing. If you’re not retiring in the next decade your old age might look decidedly different says Alistair McQueen, retirement expert at insurer Aviva. He says younger generations need to take heed of the Turner Report, which suggests they will have to save more, work longer and retire with less money.  

He also said that retirement has changed dramatically since the days before the state pension, and even since the state pension was introduced. ‘Before the 1900s, retirement used to be a time of poverty.’ ‘Then when the welfare state was introduced in the 1940s, you had five years or so in retirement, and it came to be seen as a rest period. ‘Then people began to live longer and retirement was seen as a reward now, since retirement has lasted 10 or 15 years it has become a right that people get to enjoy a great time of adventure, freedom and leisure.’ McQueen thinks the current retirees are an ‘abnormality’.

The main difference between current retirees and future retirees is the demise of defined benefit (DB) pensions, also known as final salary pensions. DB pensions are workplace pensions that pay out a percentage of final salary multiplied by the number of years worked. These pensions have been replaced by defined contribution (DC) pensions which are far less generous.  On the whole, those saving into a DC pension would have to save far more than those saving into DB pensions in order to get the same income in retirement. If you are looking to put aside more for longer, Enable’s IFAs can try and help you make the right choices for your own personal situation.

Source: New Model Advisor   

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

Pensioner incomes up since recession

Enable’s IFAs in Bishops Stortford are always ready to help people plan for retirement and it may come as a surprise to hear that retired people are 7.7% better off than in 2008 while workers' wages lag behind according to official figures.

The Government’s ‘triple lock’ – which guarantees state pensions will rise by at least 2.5 per cent every year – has been a factor behind the growth in retirement incomes, the Office for National Statistics said, meaning that most pensioners did not experience a drop in income during the recession, when workers were hit by rising unemployment and wage falls.

Increasing numbers of people investing in private pensions or annuities has also contributed to the rise in pensioner living standards. Retired people had an average income of £21,000 in 2014/15 – meaning they were £1,500 a year or 7.7 per cent better off than they were in 2007/08, adjusting for inflation. Pensioners have seen their incomes nearly triple since records began in 1977, even once inflation was taken into account, while workers’ incomes have only doubled.

Pensioners are much less likely to rely on the state pension than in previous decades. Retired households have also grown increasingly reliant on private pensions, with them making up 43 per cent of incomes in 2014/15 compared to 18 per cent in 1977.

The Pensions Minister said the Government was ‘committed to helping people enjoy a financially secure retirement’ adding, ‘Supporting people after they have worked hard all of their lives will continue to be a priority, especially as it can difficult for people to increase their incomes in retirement.’ Enable’s IFAs feel the same.

Source: This is Money


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 

Using property for retirement plans?

At Enable our IFA’s many recent surveys suggests that one-in-three people plan to use property to pay for their retirement, one set of research revealed that a third of those if spoke to plan to live on income generated by investment properties, while a little more than half said that they would sell their own home to fund their retirement. Patrick Connolly, an IFA said "People are either able to sell their main property and downsize when they get to retirement or buy additional properties and rent them out."

There are lots of reports and surveys that suggest landlords have been enjoying stable yields over recent years, with returns above the low interest rates on savings account. Capital values have of course also been rising too over the last bit of time, encouraging that very British tendency to trust in property.

Despite some of the current figures however, relying on property to keep you warm in retirement could be a risky strategy. "It should be remembered that property prices can fall as well as rise and this will be a real danger when interest rates start to rise and mortgage payments become that bit more expensive." For landlords there is also the risk that you'll have periods where your property is empty, so you would have to find the money to pay the mortgage if there is still money owing. You also need to be prepared for the costs and hassle associated with managing a rental property.

From an investment point of view it is always good to diversify, diversify, diversify. Pensions allow you to invest across a broad range of asset classes, and thereby spread your risk, if you want to talk about diversifying for your retirement funds Enables IFA’s in Bishop’s Stortford are happy to talk it all through.

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

Converting capital to income...

Retirement is a key milestone and a time typically when people assess their financial position and make decisions about how best to convert capital into income.  Buying a home has generally been a good financial decision for those now heading into retirement but it could prove an even better one with a bit of foresight.

Recently released data from the last Census showed us the growing importance of property wealth. In 2011 there were 9.2 million people aged 65 or over living in England and Wales – nearly a million more than a decade earlier. Over the same time, the proportion of those older people owning their homes has risen from 68 per cent to 75 per cent. And home prices in that time rose by 78 per cent – more than double the rate of inflation.

It is little surprise therefore that The Smith Institute said that the financial MOT should include advice on how housing assets can be utilised, particularly because of the high number of people whose property wealth outstrips their savings or pensions. It points out that housing wealth is more equally distributed than other forms of wealth such as pensions.

It is also true that as people progress through retirement, housing wealth typically becomes an ever larger proportion of overall wealth.  In a time of squeezed pension incomes and with state benefits under pressure, Enable's IFA’s might be able to help you consider how your property wealth can play a bigger role in delivering financial support as you head into later life.

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.