COMPLEX PENSIONS EXPERT AND ADVICE- HOWARD SHEARS
Old pensions not performing and why are the investment returns not what you expected?
Many people in the UK only have experience of simple pension schemes with limited investment options, perhaps taken out many years ago. These can be right for many people but if you have built up significant pension funds, you may now be feeling that your money does not get the attention it deserves and investment returns may have consequently suffered.
A change to pension rules in 2006 now means greater choice. Moreover, since the beginning of the credit crisis navigating the markets has become increasingly difficult. It is important as world markets globalise to seek out suitable investments to diversify portfolios in order to assist in avoiding falls and to take advantage of opportunities. In addition to traditional investment classes, a wise investor should constantly seek out and review new opportunities; this includes but is not limited to:
Listed shares.
Direct commercial property and property partnerships.
Direct deposit accounts.
Protected/structured products and funds.
Exchange Traded Funds (ETFs).
Direct commodities and Exchange Traded Commodities (ETCs).
Loans from your pensions to your company.
Investment in private/unlisted companies by pension fund.
Other esoteric and non-retail funds.
Modern pension systems allow you to consolidate schemes; giving you more control, better information and open up access a vast range of investment opportunities – all under one straightforward online system, accessible 24 hours a day – a far cry from one paper annual statement, often meaning things have happened and it is already too late to react to a given situation.
What are the benefits of saving for retirement via a pension as opposed to say an ISA?
The benefits of using a pension to save for retirement can often be forgotten. Remember that contributions to a pension can attract between 20% and 60% tax relief. This means a £10,000 contribution could cost you as little as £4,000 this is a 250% increase before your fund even gets invested! Whilst ISAs can be a useful savings tool, remember ISAs do not attract any tax relief so a £10,000 contribution costs you £10,000. Once invested pensions (and ISAs) grow virtually free of all tax. When you reach retirement, you can usually take 25% as a tax free lump sum. If you had an occupational scheme before 2006, then you may be able to take up to 100% of your fund as a tax free lump sum. Make sure you look in to this.
Get Advice...
Everyone should take care when it comes to transferring. Get professional advice particularly where schemes are older. Otherwise, you may unwittingly lose valuable benefits such as enhanced tax free cash and guaranteed annuity rates. Specialist advice from an experienced and well qualified financial adviser will ensure you get a thorough review of your existing pensions and advise on a suitable new investment structure.
Retirement Planning
The size of Westminster Wealth Management enables us to have several dedicated retirement specialists, essential to delivering cutting edge advice in such a complicated sector.
Through sophisticated bespoke planning solutions, our internal specialists work with other advisers to deliver:
Significantly higher (net of tax) income.
Improved access to capital.
Greater investment choice.
More control and flexibility over how/when you take benefits.
Holistic Approach
For many clients, significant advantages can be achieved by the use of Self Invested Personal Pensions (SIPPs), Wrap platforms and sophisticated personal pensions (PPs). We cover the whole range of schemes from basic Stakeholder Pensions right through to Group schemes.
However, for many of our high earning clients, standard pension products are no longer a viable means to build up a significant fund for their retirement. For many years now we have been evolving a more holistic integrated approach to creating the best benefits in retirement for our clients. Changes to pension rules and taxation rates in 2009 have changed the complexion of retirement planning in the UK, particularly for high earners. Application of the following, if used in the right way at the right time, can yield great results:
ISAs.
Systematic use of allowances.
Planning with “family pensions.”
Venture Capital Trusts (VCT) and Enterprise Investment Schemes (EIS).
Qualifying Registered Overseas Pension schemes (QROPS).
Employer Financed Retirement Benefits Schemes (EFRBS).
Small Self Administered Schemes (SSAS).
For business owners/entrepreneurs, we excel in helping our clients to extract maximum profit when they retire from their business. In order to do this, in addition to our core disciplines, we maintain a strong working knowledge of:
Corporate and offshore tax issues.
Trust arrangements.
Sophisticated tax deferral and mitigation structures.
Our bespoke approach based on a high level of understanding of subject matter allows us to blend techniques and products to find the best solutions for discerning clients. Our approach has been shown to deliver significant improvements to the level of income and capital that our clients enjoy in their retirement.
Existing Schemes
All UK resident professionals are likely to accumulate significant pension funds throughout their careers and with the demise of the final salary schemes, the investment of such funds can be crucial to the quality of our clients’ standard of living in retirement.
A key role of our process is reviewing existing schemes. Research ranges from basic personal pension reviews through to complex actuarial analysis of final salary scheme benefits.
Investment Choice
A change to pension rules in 2006 now means greater choice. Moreover, the market turmoil in 2008 has led us to seek out alternative investments to diversify our portfolios in order to assist in avoiding falls and to take advantage of opportunities. In addition to traditional investment classes, WWM constantly seek out and review new opportunities as well as assisting sophisticated clients who wish to implement their own strategy, this includes but is not limited to:
Next Steps
Please let us know if you would like to consider your options.
