Much has been written about this in the press, and you may well have seen one of the many articles predicting pension disaster. Will we all be raiding our pension pots without a thought for the future to go on a cruise?
Here at Active Chartered Financial Planners we think that Pension Reform represents a great opportunity, however this comes with a note of caution - it is more important than ever to make sure you have good advice regarding your pension.
Here’s a bit more about the key changes;
Whether you have touched your pot or not, if something happens to you before the age of 75, your beneficiaries will inherit your pension fund without any tax liability. Rules have also changed for those over 75, however this area remains extremely complex and if you are concerned, it may be worth taking advice.
But watch out…
So will you spend now or spend later?
Until now the options upon retirement were fairly limited. Now, you can pretty much do whatever you want with the pension pot you have amassed during your working life. That means you really could access the whole pot and take off around the world when you retire. But with new freedoms come new risks. If you access your pension cash now, it will be important to have a good financial plan to ensure your security once the cash runs out. And given how difficult it is to predict the path our lives will take, who knows what your financial needs will be twenty years after retirement?
So what next?
The one point where everyone agrees is that the need for good advice in retirement is now greater than ever. So much so that the government originally committed to supporting this new legislation with free pensions advice for all (this commitment has gradually turned into free pensions guidance through Pension Wise). A skilled Pensions Adviser or Financial Planner will be able to work with you to understand the nuances of your financial situation and make recommendations which fit with your goals, risk profile and personal situation.
We’d urge everyone, however near or far you are from retirement, to get a plan.
Paul Gibson APFS: Director and Chartered Financial Planner at Active Chartered Financial Services
Email Paul Gibson or telephone 01642 765957