Pension advice is type of financial advice that focus on pensions. This can either be standalone advice relating to just your pension arrangements or as a part of a wider piece of advice involving your finances (such as Financial Planing).
Pension Advice is a Regulated activity in the UK and any financial adviser that wishes to give you advice must be appropriately trained and regulated by the FCA. Whilst this has the benefit of ensuring that the advice given is of a high quality and protected by such organisations as the Financial Ombudsman Service, it does mean that there may be a cost involved for receiving advice. However, by making sure you use an adviser which offers clear, up-front pricing and the opportunity of a free consultation to discuss your situation, you should be able to make a clear and balanced decision on what type of advice is required.
Most typically the advice will centre on maximising the growth of the pension pot, making sure it is invested and accessed in a tax efficient manner, helping the pension holder understand when and with how much they are likely to retire on or a more specific problem such as transferring a pension pot overseas, consolidating several pensions into one or accessing a frozen pension.
When Pension Advice is given as part of wider financial advice (such as Financial Planing) it encompasses other areas of the individuals’ life which can lead to greater overall financial benefit.
There is a wide range of the type of pension advice that you can receive depending on your exact situation (e.g. how complex it is), what you are trying to achieve and how much you are willing to spend on pension advice.
Most pension advice will involve a review of your current pension situation, what you are trying to achieve and your preferences for how you would like to reach your goals (e.g. assessing your risk tolerance). A wider review of your finances is also common as your optimal pension arrangements will depend on how the rest of your finances are structured.
There are many things that a pension adviser can do for you, such as protecting your money from inflation, helping you understand how much you can afford to take from your pension without depleting your pension pot too early and advising on the most suitable investments that suit your appetite for risk.
Another way of Pension Advice, like much financial advice, can be seen as a way of solving problems and answering questions.
Some types of questions that pensions advice can help answer:
Analysis of your current pension pot, expected growth rate, lifestyle required in retirement, cashflow analysis and overall tax position are used to forecast when you can retire with the lifestyle you want.
By analysing the type of lifestyle you want in retirement and how much your current pension is likely to deliver you can gain peace of mind that you are putting enough away or if not then the amount you need to put away and when to reach your goal.
With busy lives and several previous employees it can be easy to lose track of old pensions, often from decades earlier. A pension adviser can trace old pension pots that you may be unaware you even have. Your adviser can then advise on the best way to access these newly found pension pots.
Many of us have old pensions, often from old employment, that can range from trivial to significant sums. A Pension Adviser can help you determine the best way to access these pensions taking into account tax and pension rules and your current and future financial situation.
An adviser can help you work out the amount that you can take out of your pension safely, without the risk of running out of funds. Helping to find that balance between enjoying your hard-earned pension and making sure your pension pot lasts long enough.
There are a lot of available tax saving opportunities in both the building up and withdrawing stages of pensions. An adviser can help you make sure you make the most of all the tax saving opportunities available and also avoid any tax penalties.
It is highly likely that your pension will spend most of its time invested in some way and as the pension holder you often have a say in how it is invested. An adviser can help you understand the different investment options and help guide you to the most appropriate for your specific situation.
A Pension Adviser works for you to solve your pension problems and make sure your pension is arranged in the most suitable way for your own situation.
They will undertake research into your issue icluding pension and tax laws and regulations, types of products and schemes that may be suitable, perform
find the best solution
understand your situation
An adviser will use their years of experience and training to
Protecting your money from inflation is just one thing a financial adviser can do for you. They can also help you understand how much you can afford to take from your pension without depleting your pension pot too early. They can also advise on the most suitable investments that suit your appetite for risk
Put simply a personal pension is a way to put money aside for your retirement. As we continue to live longer it becomes more important to make sure that we put enough aside to make sure we can live the retirement we deserve. “Retirement” itself is also no longer as straightforward as it once was. many of those reaching traditional retirement age are deciding to reduce hours and make a more gradual shift to ending their working life or alternatively stop working a lot sooner than the state pension age. Having a healthy retirement and pension plan can allow a lot more flexibility when deciding what to do in later life.
There are many advantages of using pensions to help with your retirement. A combination of generous tax breaks and the benefits of long term, well planned investment of your pension can result in a significant increase in pension size compared with other methods of putting money aside. Flexibility in private pensions is also much greater these days, for example allowing you to pass on your pension funds to your family with (in most cases) no inheritance tax due or to access you pension early if you were unfortunate enough to suffer a serious illness.
Pensions are just one type of “retirement savings” and, whilst there are many advantages to pensions, they should only be used after assessing other ways of putting money aside for retirement. As the many benefits of pensions come along with restrictions, such as when you can withdraw from your pension pot, it is often more suitable to use pensions with a combination of other products. Pension advice from an Independent Financial Adviser will
Pensions are important and unfortunately it can be easy to come across misinformation or out of date views. A quick call to a pension adviser can clear up any questions or concerns you may have and help you to make the right decisions. A quick call for which your future self may be very grateful!
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