Planning for retirement is one of the most important financial decisions you will make in your life. However, it can seem daunting and requires not just one decision, but a lifetime of them.
We help our clients to look forward to their retirement with confidence. Together we identify their desired lifestyle and build a plan around their individual circumstances. Once implemented, we then regularly review the progress, adapting the plan as required.
We typically start working with people in their late 40s, 50s and 60s. We build on the pensions and assets they have already acquired in their working lives, often consolidating them from individual, unrelated products into a personal plan for retirement.
For some, the goal is early retirement, for others it is to keep working whilst knowing that it is now a choice rather than a financial necessity.
Once in retirement, we help our clients drawdown an appropriate blend of capital lump sum withdrawals and income from their pensions and other assets to help fund their lifestyle. We also incorporate their desires to give money to their family or preferred charities and prepare for the unexpected such as the potential cost of later life care fees.
When planning for retirement, it is the people and their plans that matter most, but some of the specific areas of pension advice we incorporate into retirement plans are;
An additional tax that is charged once the total value of benefits taken from all your pensions crosses a certain threshold. The current Lifetime Allowance is £1,073,100 (as at 2021/22).
It is not a limit on pension values or contributions. In some cases, and with the proper advice, it can still be worth making pension contributions even if the value of your pensions are close to or above the lifetime allowance. This is due to certain tax and wider planning opportunities.
Any liability to the Lifetime Allowance tax charge will fall between the ages of 55 and 75. This is the key period when people plan for and enter into retirement. We help clients to manage the timing of taking pension benefits and paying any lifetime allowance tax liability within their overall plan.
An income threshold above which the Annual Allowance for pension contributions reduces from £40,000 to as low as £4,000. In 2021/22 the Tapered Annual Allowance begins on Adjusted Income above £240,000 per annum.
We help clients affected by the taper to identify the impact, and reduce or remove any tax liability. We work with their employer if their workplace pension benefits risk creating a tax liability and advise on alternative ways to save for retirement if their capacity to save into pensions is then limited.
For those who may wish to ‘catch up’ on their pension contributions, or make a contribution above this year’s Annual Allowance, Carry Forward enables pension contributions from unused Annual Allowances from the previous 3 tax years. It can be a particularly useful way of planning for business owners.
Whilst the eligibility and age criteria for State Pensions undergo frequent change, once in payment it is a source of secure, inflation-linked income that is payable for life. We ensure clients receive what they are entitled to and take advantage of any opportunities to either top-up or defer to support their individual retirement plans.
We are qualified and authorised to advise on Defined-Benefit Pension Transfers. However, following analysis, it is rarely something we advise our clients to do. A Defined-Benefit pension provides a guaranteed, inflation-linked income that lasts a lifetime. Rather than transfer it for flexibility, we have helped many of our clients use their Defined-Benefit pension as the foundation of their retirement income, enabling them to build up and use other assets to provide the flexibility they require.
Financial Planning Partners (FPP)
19 Wellington Business Park
Tel: 01344 778990
FPP are committed to dealing with clients and prospective clients in a professional and ethical manner and to that end adhere to the principals laid out in the CII Code of Ethics, a copy of which is available on request.