Retirement planning
“Pension simplification - what simplification?”
The Government has gone through a long process of reviewing and simplifying the complicated structures of the pensions industry in this country. Sadly simple is not a word that can be used to describe what is left!!!
The process of change has been quite a challenge to us all, not helped (or mostly created) by the fact that the government has brought in a number of changes only to reverse them months later after the industry has spent millions making the necessary changes.
Anyway, the changes that have come in over the past few years have made pensions far more flexible and have also driven down the charges associated with them, which has to be a good thing.
It is now possible for people to invest in just about any sort of investment fund or share the person wishes within their pension as well as commercial property. As far as the options at retirement are concerned, a 25% tax free cash lump sum can be taken from the build up fund plus an income, which may be via a traditional annuity or by what is referred to as income drawdown (which is basically just drawing an income from retained investments). Sadly one of the government u-turns was with regard to your options at age 75 which are now a lot more restricted, although they do still allow an income to be drawn down.
At the end of the day a pension is just a form of investment, and it like any other needs to be reviewed and managed if it is going work well for you. Sadly it is a reality that many pension funds have been invested in With Profits funds which have sadly performed very poorly over the last few years making a big dent in peoples provisions.
Despite simplification this is still a highly complicated area of planning and thus we would recommend that in the first instance you contact us to discuss your needs further.