Pensions have been the hot topic recently following the budget in March. We have a flurry of blogs covering some of the pension debates.On a similar basis, protection for the family from the State has been changing shape over the last few years, but on a more gradual basis. Read more
Work Place Pensions – Increasing Need for Advice
Pensions Minister Steve Webb stated this week that he believes budget changes would fuel appetite for workplace pension advice at the Retirement Planning Forum Awards 2014.
I think he’s right. The guidance guarantee will surely explain just enough to people due to take retirement benefits to prompt the need for independent financial advice. Guidance for 15 minutes, even when it is free, is just not enough to cover the options for retiring staff. Read more
Retirement plans a reality check
Older people’s charity Anchor had researchers question 2,000 people about their perception of a happy retirement – the outcomes can be summarised:
Most of us long to retire by age 63, with a three bedroom home just 11 miles away from the rest of the family. Read more
Pension Income Alternatives to Annuities
Whilst annuities are the favoured approach for the majority of people retiring they tend to get used for the smaller pension funds. The average pension fund size at retirement is circa £35,600 and the median size pension fund is £20,000.
For those people with substantial assets for their retirement a variety of other options may be more appropriate. A range of different types of ‘Drawdown’ could give additional flexibility for clients with six or seven figure pension funds. Read more
Annuities
Following the recent budget announcements on more flexible retirement options for those drawing pension benefits the annuity sales figures have declined dramatically. People may defer a decision on how they take their retirement benefits until the legislation changes for April 2015 are clarified.
Prior to the announcement, the majority of people, circa 75%, who reached retirement with defined contribution pension savings, used them to purchase an annuity. Read more
Pensions – Potential Legislation Changes
The consultation on the proposed legislation changes, ‘Freedom and Choice in Pensions’ for the proposed changes in April 2015 closed yesterday, 11/06/14.
As we know, the majority of this focus has been on the ‘at retirement’ market to give more choice and flexibility for those people drawing their pension benefits from Defined Contribution pension schemes. Read more
Pension Changes
I’ve been considering a lot of information, points of view, statistics and opinions following the recent budget announcements on the actual legislation changes implemented on 27/03/2014 and the proposed pension changes for April 2015 still under consultation.
The ‘at retirement‘ population have reacted to the budget announcements and the purchase of annuities has fallen off a cliff as individuals defer their decisions, awaiting further clarification once we get more direction on the legislative changes for next April.
Personally, I view the announcements as generally good news for those with substantial assets for retirement but I am a little concerned about the impact on people retiring or drawing benefits with an average level of pension fund.
For those people who have substantial assets for retirement the added flexibility the legislation should provide will help. Product innovation should also bring more options to the market shortly.
I also see the flexibility outlined in the budget as a really positive message for pension funding. For those that can afford to fund pensions properly the new legislation should be a further incentive to fund pensions.
With the wider range of options for individuals considering drawing their retirement benefits it is more important than ever that you take quality independent financial advice. For those of you 5 to 10 years away from your forecast retirement benefit date start talking to us now. The earlier you start planning the better.
Steve Speed