Ash Tree Financial Services

There are two stages in retirements planning:

• Building a fund during your working life
• Taking an income to provide a good standard of living in retirement

Pension Planning

Retirement is not something that looms large when you are young or when you have family and mortgage commitments. However, it is important to consider it as early as possible, because the sooner you start a pension plan, the lower the contributions that are needed to provide a reasonable income in retirement. If you rely on the State Pension on its own, your lifestyle in retirement is likely to be fairly basic. Other points to bear in mind are that people are living longer and Government measures already announced mean that the majority of the current working population will have to wait longer than the present ages of 65 (for men) and 60 (for women) before they receive their State Pension. It is increasingly important that you make your own provision, therefore.

There are many forms of pensions; these include:

• Personal pensions
• Stakeholder pensions
• Employer-sponsored schemes of several different types
• Self-invested Personal Pensions (SIPPs)
• Policies for contracting out of the State Second Pension (formerly known as SERPs)

It is not necessary to be in employment to make contributions to a pension and obtain the available tax relief. Anyone is allowed to take out a pension plan.

Sometimes, people prefer to use means other than a pension plan to save for retirement, an ISA for example. Tax relief is not available then, but there are fewer restrictions on how you can use such savings. This is a mixed blessing, as there may be the temptation to dip into the pot when expenses arise, so that the funds are not then available when retirement arrives.

These and the many other considerations involved make this a complex subject. We can help simplify it for you and advise you on the most suitable method of saving for retirement, taking into account your personal circumstances and requirements.

Review of existing pension plans

Many people will have several plans in place, especially if they have changed jobs on a number of occasions. The charges on older plans tend to be higher than is taken from more modern contracts and, of course, the more the pension company extracts from the plan, the less it will grow.

Even if you have only one plan, it would be sensible to ask us to check whether this is still the best and most economic place to be saving for retirement. If you are in more than one scheme, not only might we be able to suggest a lower-priced alternative, but the consolidation in one plan would greatly reduce your paperwork and make your monitoring easier - one annual statement instead of half a dozen, perhaps!

Then there is the question of where the money is invested. The type of investment chosen by someone 30 years away from retirement is not necessarily right for someone in their 60's. There have always been "ups and downs" in the Stock Market and a person within 5-10 years of retirement should try to protect their pension funds from the effects of any fall over those last few years. The income for the whole of retirement is dictated by the amount of money available on the day the arrangements are made. Many people saw a fall of 30% or more in the value of their pension funds between January 2008 and early 2009. Imagine the feelings of those who had to take retirement benefits at the worst time.

We cannot guarantee that we can help you avoid the risk of falling pension fund values, altogether, but we can suggest appropriate choices of investment based on your current personal situation, which should limit the damage.

Retirement Income Planning

Again, there are many options and it is important to make the right choice, because you will be making a decision that will effect your standard of living for the remainder of your life.

It is possible to take retirement benefits at any time from age 55. You do not have to stop work to take an income for your pension plans.

When you do decide to take an income, there are a number of options and matters to consider; the following are among these:

• The arrangement of an annuity from whichever provider is offering the highest income for your circumstances and requirements; you are not limited to the Company where you have the pension plan.
• If you have several pension policies, these can be amalgamated to provide one source of income.
• If you are a smoker, or have certain health conditions, some providers offer enhanced annuity terms. Depending on your circumstances, these can provide significantly more annual income than obtainable from a standard annuity.
• If applicable, you could arrange a joint annuity, to provide income for your spouse (or civil partner), should you die first.
• There are choices of a level income or one that rises each year.
• It is possible to arrange an income without purchasing an annuity.
• It is possible to withdraw part of the available fund in a tax-free lump sum.

The products available include:

• Conventional lifetime annuities
• Unit-linked lifetime annuities
• With-profit annuities
• Capital-protected annuities
• Phased Retirement (Phased Annuity Purchase)
• Phased Pension Fund Withdrawal (Phased Drawdown)
• 5-year Rolling Annuities( or temporary annuities)
• Variable (or third-way) annuities
• Drawdown Pensions

As you can see, this is a very involved matter. However, we have the experience and qualifications to simplify it for you and help you decide upon the arrangement that will be most suitable for you at retirement and thereafter.

Ash Tree Financial Services is an appointed representative of Lighthouse Advisory Services Limited, which is authorised and regulated by the Financial Services Authority.

The services offered on this website are for UK residents over the age of 18

How to contact us:

By Post: Ash Tree House, 48 Sutton Mill Road, Potton, Bedfordshire, SG19 2Q
Telephone: 01767262760 or 0845 868 139 (local rate)
Email: info@ashtree.u.com

Or please use the online pension enquiry form.