Pensions

Insights - Pensions

by Graham Bond 19 Jun, 2017

Quite often friends and clients ask me about the best pension plans and I can understand. Pensions are complicated, even more so since Pensions Freedoms came into play.Successive Governments have tinkered with the pension rules and regulations time and time again. I started in the Financial Services Industry in 1984 and I can say each year the government has made some sort of change. Sometimes for the better or worse, but usually it adds another layer of complication. Terms such as Lifetime allowance, Fixed Protection, Capped and Flexi Access Drawdown are technical terms that generally confuse the public.

In its simplest form a pension is a savings contract with tax breaks written under pension rules.
by Graham Bond 26 Apr, 2017

It’s often said that retirement can seem as big a challenge as starting your first job. To enjoy a comfortable old age means doing some in-depth thinking well in advance, asking yourself what your goals are and how much money you want to have at your disposal when the time comes.

So how should you approach creating a robust financial plan?

A NEW SLANT ON MASLOW’S PYRAMID

Many people find it helpful to think in terms of Abraham Maslow’s famous Hierarchy of Needs. His pyramid diagram contained various levels of need that human motivations generally move through, starting with the physical requirements for human survival, and ending with mankind’s highest aspirations.

Adapting this approach to retirement planning was pioneered by US money guru, Mitch Anthony. Using this hierarchical approach in a personal finance context can be a useful aid in deciding how to work out how much retirement income you need.

SURVIVAL INCOME

This is the base of the pyramid and consists of the income you need to pay all your basic household expenses. In effect, it means drawing up a budget that covers all your likely regular bills and running costs.

SAFETY INCOME

The next layer up, this is the amount you might need to meet life’s unexpected events. Typically, this would include health and later-life care costs, loss of income and any emergency financial help you might want to give your family.

FREEDOM INCOME

This layer is all about assessing the likely cost of doing and enjoying all those things that you never had time to do before you retired. So if you’re planning a trip, a major purchase or want to indulge yourself in other ways, this is the amount you feel you’ll need.

TOPPING OFF THE PYRAMID

Many people add a gift layer representing money they want to pass onto children and grandchildren during their lifetime, and some add a dream layer, their ultimate ‘bucket list’, to the very top.

By viewing your finances in this way, you can gain a clear picture of how much you need to have saved by the time you reach retirement. With these amounts in mind, you can build up a comprehensive financial plan to help ensure that you can enjoy the sort of retirement you’ve always wanted.

by Graham Bond 08 Apr, 2017

A recent report commissioned by Royal London estimates that millions of workers who retire before their State Pension Age could give a significant boost to their state pension.

If a worker misses out on a number of years National Insurance contributions, for example early retirement, career break or working abroad, they can make voluntary payments for the missed years. Royal London estimate this can give a return of around 30%.

Employees of schemes that were contracted out might also be able to catch up on the missed years.

The new Flat Rate State Pension was introduced earlier this year. For people retiring after 6 April 2016 the full flat rate pension is £155.65 per week. This is based on someone making 35 years of full flat rate national Insurance contributions. However, people that paid reduced contributions will not receive the new rate at the start of the scheme.

Former Lib Dem MP Steve Webb, is now director of policy at pensions firm Royal London. Mr Webb said that “paying voluntary or ‘Class 3’ contributions were attractive because the rate paid on these contributions is heavily subsidised by the Government.”

He confirmed that one year of Class 3 National Insurance Contributions can be purchased for £733. This will potentially boost someone’s state pension entitlement by £230 per year for the rest of their lives.

Assuming someone lives for twenty years in retirement then an additional £4600 of extra State Pension would be generated. Someone who filled five ‘missing’ years in their national insurance contributions could receive an extra £23,000 in pension by paying £4,000, according to Webb.

Royal London have recently issued a publication called ‘ good with your money'.   It provides useful information about the state pension.

Webb said: ‘Large numbers of workers could gain a substantial boost to their   retirement planning   for the payment of a relatively modest lump sum. But the rules around topping up State Pensions are complex so we hope that our new guide will help people to navigate the system.

‘It is rare for the Government to offer something on such generous financial terms and we want to make sure that everyone knows how to take advantage of this opportunity’.

Many public sector workers are entitled to take their workplace pension at the age of 60, but will not get a state pension until they are 65 or 66.

This means that no national insurance contributions are paid between their retirement date and State Pension Age. Buying additional years using class 3 contributions can be a very effective way of boosting your State Pension.

Royal London estimates around 210,000 NHS workers, 150,000 teachers and 130,000 civil service workers could make gains from voluntary contributions payments.

More on the State Pension

If you are interested in finding out more about your State Pension entitlement, then the best thing to do is to obtain a pensions forecast. This is very simple to do. All you need to do is call the Future Pensions Centre on 0345 3000 168. You will need your personal details to hand including your National Insurance number.

by Graham Bond 08 Apr, 2017

A recent report commissioned by Royal London estimates that millions of workers who retire before their State Pension Age could give a significant boost to their state pension.

If a worker misses out on a number of years National Insurance contributions, for example early retirement, career break or working abroad, they can make voluntary payments for the missed years. Royal London estimate this can give a return of around 30%.

Employees of schemes that were contracted out might also be able to catch up on the missed years.

The new Flat Rate State Pension was introduced earlier this year. For people retiring after 6 April 2016 the full flat rate pension is £155.65 per week. This is based on someone making 35 years of full flat rate national Insurance contributions. However, people that paid reduced contributions will not receive the new rate at the start of the scheme.

Former Lib Dem MP Steve Webb, is now director of policy at pensions firm Royal London. Mr Webb said that “paying voluntary or ‘Class 3’ contributions were attractive because the rate paid on these contributions is heavily subsidised by the Government.”

He confirmed that one year of Class 3 National Insurance Contributions can be purchased for £733. This will potentially boost someone’s state pension entitlement by £230 per year for the rest of their lives.

Assuming someone lives for twenty years in retirement then an additional £4600 of extra State Pension would be generated. Someone who filled five ‘missing’ years in their national insurance contributions could receive an extra £23,000 in pension by paying £4,000, according to Webb.

Royal London have recently issued a publication called ‘ good with your money'.  It provides useful information about the state pension.

Webb said: ‘Large numbers of workers could gain a substantial boost to their retirement planning   for the payment of a relatively modest lump sum. But the rules around topping up State Pensions are complex so we hope that our new guide will help people to navigate the system.

‘It is rare for the Government to offer something on such generous financial terms and we want to make sure that everyone knows how to take advantage of this opportunity’.

Many public sector workers are entitled to take their workplace pension at the age of 60, but will not get a state pension until they are 65 or 66.

This means that no national insurance contributions are paid between their retirement date and State Pension Age. Buying additional years using class 3 contributions can be a very effective way of boosting your State Pension.

Royal London estimates around 210,000 NHS workers, 150,000 teachers and 130,000 civil service workers could make gains from voluntary contributions payments.

More on the State Pension

If you are interested in finding out more about your State Pension entitlement, then the best thing to do is to obtain a pensions forecast. This is very simple to do. All you need to do is call the Future Pensions Centre on 0345 3000 168. You will need your personal details to hand including your National Insurance number.

by Graham Bond 29 Jun, 2017
Here's an update on Personal Finance Portal. From the 4th July our client portal will have a new look and feel about it. 
The software provider we work in conjuction with have revised the format to make it easier to use for our financial planning clients.

The Personal Finance Portal is a quick and secure way to obtain up to date valuations on your pensions and investments. It also offers you a way to communicate safely with us as the service is encrypted. The same cannot be said about email, which is not secure. 

The aim is to make the navigation easier to use and to provide more information to you on your finances. 

The video below shows some of the improvements that will be made. We hope you find it useful and informative. 

To access our portal please click this link

If you would like to find out more about the Personal Finance Portal please feel free to contact  us on 01454 321511. Consilium Asset Management offer Independent Financial Advice to private and business owners in the Bristol area. 
by Graham Bond 21 Jun, 2017

Over the month weeks and months, we are looking to improve the personal finance portal (PFP) for our clients. The first stage is to introduce a live chat, audio and video service whilst clients are logged into PFP. This is the first level of improvements we will be making over the coming months. The live chat service is safe and secure.

by Graham Bond 19 Jun, 2017

Quite often friends and clients ask me about the best pension plans and I can understand. Pensions are complicated, even more so since Pensions Freedoms came into play.Successive Governments have tinkered with the pension rules and regulations time and time again. I started in the Financial Services Industry in 1984 and I can say each year the government has made some sort of change. Sometimes for the better or worse, but usually it adds another layer of complication. Terms such as Lifetime allowance, Fixed Protection, Capped and Flexi Access Drawdown are technical terms that generally confuse the public.

In its simplest form a pension is a savings contract with tax breaks written under pension rules.
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