MAKING SENSE OF PENSIONS
New legislation was introduced in 2006 that was supposed to simplify pensions. But ask any financial adviser and they will tell you this didn’t happen – they remain as complicated as before.
Even those of us in the industry find it hard to keep up to date with changes to the pensions legislation and remembering what the rules were when our clients set up their schemes is even more difficult. This is why you shouldn’t try to DIY.
Most people tend to amalgamate their various pension schemes at retirement, which brings them under the latest legislation and allows up to a quarter of the fund to be taken as tax-free cash.
On the face of it, this might sound like a good deal, but those of you who set up pensions before 1988 could potentially release bigger sums of money by leaving the fund where it is.
Crucially, the amount of tax-free cash you can extract from your fund on retirement is not the only consideration when deciding whether to consolidate your pensions. There are lots of factors to take into account, not least the guaranteed conversion rates of capital to income that many 1980s schemes offered. Some are not as good as they seem, but you could lose this option by transferring your funds.
Having saved your entire life, your future depends on making the right decision about what to do with your pensions when you retire. Insurance companies only provide factual information and your loyalty counts for nothing – 75% of the time, there are better deals to be had elsewhere.
Like the vast majority of independent financial advisers, at Campbell Harrison your first appointment is free, so it won’t cost you anything to find out if we can make your funds work harder for you.
If you are about to retire and you have pension schemes that are more than 20 years old, seeking professional advice is not a luxury, its a must, particularly at the moment when funds have taken such a hit.
If you would like advice on financial affairs please contact</strong>:
Retirement and Investment Planning
19 Paradise Square, Sheffield S1 2DE
Tel: 0114 272 3994 Fax: 0114 272 3775
Authorised and regulated by the Financial Services Authority
*This article is not intended to address your particular requirement and should not be relied upon in making any decision.
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