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Do I Need To Get Pension Advice?

Do I Need To Get Pension Advice?

It can be difficult to know whether you need pension advice or not.  There are a wide range of types of advice you can get, everyone’s situation is very different and it can be difficult to work out how much an adviser would charge, or what the benefits would be.  Not to mention that in some cases it is a legal requirement to receive advice but in others it is not. 

This article will help break down what types of pension advice you can get, which could be suitable for you and what the costs and the benefits might be.  We also cover when it is a legal requirement to receive pension advice.

when to get pension advice?

at retiremnt – mistake if this is the only time!  need to pay attanetino to pensions throughtout life to get full benefit.

What is Pension Advice?

Pension Advice is a type of Financial Advice aimed at those who need assistance in their pension arrangements.  There are different types of advice that can be given and this depends on the individuals situation and personal preferences.  For example, someone at the start of their pension journey who is young and far from retirement will have different needs compared to someone close to retirement with a large pension pot or indeed someone who is already retired.  

Often a core focus of pension advice is to grow your pension pot; 

Most Pension Advice will tend to focus on growing a pension pot in the most suitable and tax efficient way, making sure it is accessed (withdrawn) in the most suitable and tax efficient way and making sure that the pension holder understands how their pension is arranged, how it is performing and what they can do to both boost their pension and how they can plan their retirement around their forecast pension income.

Your Pension is likely to be the most valuable asset you build over your lifetime and it may support you for up to 50 years of your life.  The increased choice and flexibility for accessing your pension in the UK has resulted in many more options for an adviser to efficiently arrange your pension around your personal situation to boost your pension but it has also bought with it added responsibility and risk.

There is much to discuss about Pensions and whether you may need advice or not (and what type of advice) depends on a wide range of factors.  Please read on to determine if you may need any advice or what type of advice.  If you are still uncertain then please give get in touch and we will be happy to discuss with you what advice would be best for you.

Benbefits of Pension Advice

 

 

beneits of pensoin advice – understand the strategy.  keep upto date with staretgy.  Lifetime funds

When Might I Need Pension Advice?

There are certain situations and times in your life that make it more likely you’ll need pension advice:

  • You are approaching retirement and need to get your pensions in order to both understand what you have and to maximise the benefits.
  • You are already drawing down your pension and you need to do so in the most tax efficient way possible whilst still growing your remaining pension pot.
  • You have “frozen” or “deferred” pensions that you wish to access or consolidate.
  • You want to help your pension pot grow by taking advantage of tax breaks, investment opportunities and a full range of pension products and schemes.
  • You may have several pensions from different employers that you need to consolidate.
  • You have started to thinking about your future and realise that the earlier you start to build a pension the greater chance you have of achieving the retirement you deserve, but you want to know the best way
  • You want help to plan and understand what you need to do to achieve a pension that provided you with the retirement you want when you want  

Examples of some times when you might need advice:

Accessing/Drawing your pension

The day will come when you decide you want to start enjoying your pension and you will begin to “draw” it down.  You have been patiently building it all your life and you want to make sure you’re getting the most out of it.

As such you will need to consider how you will access it.  Gone are the days when you would simply retire one day and draw your entire pension in the form of an annuity (regular lifetime payment), though of course this is still an option!  Accessing your pension in the right way can save you tax and help boost the amount you can withdraw.

With the introduction of Pension Freedoms there is much you can do with your pension and this gives rise to many opportunities but also some risks.  For example, savings on tax is one opportunity: by arranging and drawing your pension in the optimal way for your situation you can reduce your tax bill.  But if done incorrectly there can be potential tax penalties.

Ways that Pension Advice Can Help

  • Take advantage of tax-free cash. Taking all your tax-free cash up front might not be a good idea for you and it could cost you more in the long-run
  • Plan your retirement
  • Make sure you stay on track with your goals
  • Help manage your risk
  • Regularly review and refine your investments
  • Manage fund with a long term approach
  • Keep you up to date with pension rule changes that might affect you
  • Help Understand and evaluate the costs involved with different investment options
  • Access your pension pot tax-efficiently
  • Escape common expensive mistakes and investor biases
  • Help implement alternative plans (Plan B, C or D)
  • Choose diversified investments (location and industry-based)

Examples of some ways that Pension Advice can help:

 

Protecting your wealth – 

Unfortunately pension rules are complex and it can be hard to be sure you’re investments are in the right place.  It can be easy for someone with limited experience in these areas to make beginner mistakes, as we all do when we first approach a new situation.  Unfortunately mistakes in this area can be costly and easily run into many thousands of pounds.

Our advisers have specialised training and have already learnt from their mistakes!  This not only helps save you money but gives peace of mind that you have ensured that the pension pot you’ve been steadily building over your lifetime is protected.

avoiding scams

Unfortunately pension scams have been increasing in recent years.  The introduction of Pension Freedoms in 2015 (the liberalisation of regulations around pensions) gave those with pension savings much more freedom on what they can do with their pension pot.  However, this has also led to an increase in unscrupulous individual taking advantage of many people trust and lack of pensions experience to defraud many out of their lifetimes savings.   

Speaking to a parliamentary committee in January 2021, an FCA spokesperson told MPs that “…it is very clear that there is a correlation between pension freedoms and the way in which a scammer or fraudster is going to use this as an opportunity”.

If your pensions are arranged through a Regulated Pensions Adviser then you have peace of mind that to only do you have experts working for you that can easily detect scams but you have the confidence of being protected by the Financial Services Compensation Scheme and the Financial Ombudsman Service.

If you are unsure about a pension opportunity that you have been approached about please ensure you thoroughly research it, read through such site as *** and remember you can contact a 

Accessing/Drawing your pension

The day will come when you decide you want to start enjoying your pension and you will begin to “draw” it down.  You have beeb patiently building it all your life and you want to make sure you’re getting the most out of it.

As such you will need to consider how you will access it.  Gone are the days when you would simply retire one day and draw your entire pension in the form of an annuity (regular lifetime payment). though of course this is still an option!

With the introduction of Pension Freedoms there is much you can do with your pension and this gives rise to many opportunities but also some risks.  For example, savings on tax is one opportunity, by arranging and drawing your pension in the optimal way for your situation you can reduce your tax bill.  But if done incorrectly there are potential tax penalties.

“Pension Freedoms” mean that these days there are a range of options when it comes to accessing your pension.  you no longer need to buy an annuity or take your funds at a set date and many chose to access their accumulated funds in stages.  making sure that funds are accessed in the most efficient way so that the total amount available is as big as possible and accessed when needed.

Phasing your retirement

Many people approaching the “age of retirement” decide to work less or retire from one role and continue to work part-time

There is much scope for the arrangement of how a pension pot is  – taxes 

there are a variety of ways in which to access your pension when you decide to start accessing your pension pot.  Often referred to as “drawdown” or “de-accumulation” this is the stage where you start to access your funds and usually (but certainly not always!) stop contributing funds to your pension.

STATE PENSION x 3

HEALTH X 2

RETIREMENT INCOME X 1

CARE X 1

ADVICE SERVICE X 1

How do I know if I'm getting Quality Advice

There are something you can look out for in a financial adviser when looking for quality advice.

Are they Regulated?

Its a legal requirement in the UK to be Regulated by the FCA to give financial advice.  You can check if an adviser or firm is regulated at the FCAs website – LINK!!

Are they independent?

Advisers can be either Independent or Restricted.  A Restricted Adviser works for a particular provider (i.e. a high street bank) and is only allowed to recommend their products.  An Independent Adviser works for the client and is able to access the whole of the market to find the most suitable product.

Value for Money?

There is often a big benefit from receiving pension advice, but it’s important to understand the costs before you can make a decision.  on what type of advice to get or how much opr if at all.

Leaf Financial Advisers

Face Your Future With Confidence

Fully Independent

We access the entire market with no restrictions to make sure you get the most suitable and lowest cost solution.

That’s the advantage of using an Independent Financial Adviser.

Regulated

Flexible

We offer flexible appointments, including evenings and weekends, not just 9 – 5. Because good advice fits around your schedule, not ours.

Just one example of our customer first service.

Personal Adviser

We make sure that you deal with your own Personal Adviser all the way through the process.

If you need to chat, they’re there for you. (no call centres!)

Do I have to see a financial adviser for my pension?

There are a few specific instances when you are required to receive a certain type of pension advice.

Firstly it only applies to a certain type of pension.  These pensions are often referred to as Final Salary or Defined Benefit pensions and will contain a “guarantee” over how much your salary will be (i.e. it is guaranteed to be based on your salary when you retire).  The pension must also be worth over £30,000.

If you have this type of pension and you wish to transfer it to a different pension then you will likely need regulated pension advice.  If you wish to take your pension as usual when you reach retirement then you will likely not be required to need advice.

Please note that the above is general information, there are many detailed pension rules and everyones pension situation is unique.  If you are at all uncertain please get in touch and we will be happy to help.

 If it is to be taken as originally intended (i.e. you are simple taking the monthly pension income post retirement) or there is no guarantee in place then generally advice is not needed, though there are still many situations in which it is highly recommended (to help boost the value of the pension amount received).

 

 

In the cases where you aren’t required to use a financial adviser to access your pension, it is still worth considering if it would be benefit to use the services of one.

. But if you don’t take advice, it’s hard to know how much to take and how best to take advantage of tax-free cash. Taking all your tax-free cash up front might not be a good idea for you and it could cost you more in the long-run

Face Your Future With Confidence

Pensions are important but unfortunately also very complicated.  Please don’t let this or the fear that advice will be expensive to put you off understanding your pension and protecting your future.

We are happy to discuss any issue or answer any questions you may have with zero obligation or cost.   We actually enjoy talking about pensions!

Fill out our contact form and an adviser will call you back at a time that is convenient to you

Give us a ring for a Free no obligation discussion on how we may be able to help you: 01173 823 823

Drop us a line with any query you may have and we'll make sure we get back to you as quick as we can: contact@leafifa.co.uk

Can you get free pension advice?

Professional Pension Advice is valuable and well priced comprehensive advice can give a significant benefit yet there are some in a position who do not have the disposable income to pay for advice, even if they are aware of the benefit they receive would be greater than the cost.

There are a few ways in which pension advice can be received for free or alternatives ways in which the cost can be met without requiring a large up front payment.

The Pension Advice Allowance

The pension advice allowance was introduced in 2017 and it allows you to withdraw up to £500 from your pension pot to use on the cost of paying for pensions advice.  There will be no tax due on the withdrawal as long as it used to pay for financial advice.

The £500 allowance can be access three separate times, although only once per tax year.  This is so you can access advice at different times in your life.

The Pension Advice Allowance is only available to those on Defined Contribution pensions and be accessed at any age. 

Employer Funded Advice

Companies can pay for financial advice for their employees without having to pay income tax, up to a limit of £500 (this was increased from £150 in 2017).

This can be combined with the pension advice allowance to give a potential total of £1,000 that can be used towards financial advice.

Take Advantage of a free consultation

Leaf Financial Advisers Ltd. also offers a free consultation service.  This can be arranged as an official consultation that will allow us to give regulated advice.  There is no charge for this service. We will talk through your situation and help you understand the different types of options you have, the types of advice you may benefit from, the cost of receiving this advice and what the advice would involve.  This is a commitment free service that we are happy to provide as part of making financial advice more accessable to all.

How much should I expect to pay for pension advice?

It is important to both understand not just how much pension advice can benefit yourself, but how much it is going to cost.

There is a wide variety of the type of advice you can receive, which will be determined by your unique situation.  This can include how far you are from retirement, how much your pension is worth, your retirement goals, what type of and how many pension pots you have.  There are also different levels of advice, with more detailed and comprehensive advice attracting a higher cost (though usually also a greater benefit).

The best way to find out how much a particular piece of advice will cost is to speak to an Independent Financial Adviser that offers a free consultation.  Once they have discussed your situation and what you are trying to achieve they should be able to give you a summary of any costs or benefits.

Contact Us

Please fill out the below form and an Adviser will call you back at your desired time:

Finding the right independent financial adviser (IFA) is an important decision and should not be made hastily.  We want to help you make the right decision, both for which adviser you select and what type of advice you elect to receive.

We offer an initial consultation for free without cost or obligation, giving you the opportunity to ask any questions you have about the advice process, our firm, our costs or anything else you are unsure about.

Clients often worry that advice will cost too much.  Our Fair Price Promise means we will only engage a new client if we believe the benefit will exceed any fees we may charge.

Please get in touch today for a chat about how we can help you.

Give us a ring – 01173 823 823

Drop us a line – Contact@LeafIFA.co.uk

Send us a Tweet – @BristolIFA

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Fill out our contact form and an adviser will call you back.

Give us a ring for a Free no obligation discussion on how we may be able to help you: 01173 823 823

Drop us a line with any query you may have and we'll make sure we get back to you as quick as we can: contact@leafifa.co.uk

Thank You!

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