Page 45 - Phonebox Magazine May 2013

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Finance Matters
Greater choices at retirement result in need for careful planning?
Pensions in the UK have seen many changes over the last 20 years and no doubt will continue to do so. One of the biggest changes was the introduction of Income Drawdown. This enabled people to retain their pension funds and take an income from them rather than purchasing an annuity.
The traditional route of buying a conventional annuity provides certainty for the retired that a 'guaranteed' income is paid to them for the rest of their life. Furthermore, there is an option to have it continued at either the same or a reduced rate for their spouse, following their death.
There are drawbacks with this route though, not least that a level annuity will lose out to inflation and over time this can be con- siderable, depending on the level of inflation. For those happy
to take the risk, Income Drawdown allowed the fund to remain invested, thereby giving the individual the opportunity to benefit from future growth, albeit originally only until age 75 when an annuity needed to be purchased.
These days, from age 55 Income Drawdown allows either Capped Drawdown or Flexible Drawdown. Capped Drawdown (as the name suggests) has a limit on the level of income you can take
and this is set by the Government Actuaries Department (GAD). Up until March 26th this year the amount of income you could take was set at 100% of the GAD rate. However, this has now been increased to 120%, a level it had previously been at.
There is also an option called Phased Retirement which can be suitable for some, whereby you slowly move your pension fund across to either an annuity or Income Drawdown.
This is a complex area of planning but a vital one that will affect your income levels throughout retirement. The vast array of choic- es (many of which have not been mentioned here) mean taking an income in retirement is rarely a straight forward decision.
If you would like to discuss or review your current pension arrangements or your general retirement planning, then please call us. Remember, initial meetings are free and we are happy to come to see you in the comfort of your own home. See our advert below.
This article does not constitute advice and should not be taken as a recommendation to purchase or invest in any of the products mentioned.
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...that if you had invested £1,000 in the best performing Investment Management Association Investment Fund at the beginning of 2012 it would have been worth £1,443 by the year end but if you had chosen the worst, it would have been worth just £570?
This is a clear indication of the importance of selecting the most suitable funds and the need for diversification.
Advison can help you construct a portfolio of investments that take into account your aims, attitude to risk and timescales. Why not contact us today for a free initial meeting. Remember, initial meetings are always without cost or obligation.
Having restructured my finances with Advison, my family is now in a far better financial position than I envisaged was possible prior to seeing them.
Mrs M. Buckinghamshire
Did you know?
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Speak to Advison
Call us now on 01908 285690
Advison specialises in Investments, Retirement Planning and Protection. We offer a return to the traditional values that only a smaller company can offer, a service we find is appreciated by the more discerning client.
www.advison.co.uk
If you choose to proceed on a fee basis, our typical hourly fee is £150.
Advison Ltd is an appointed representative of IN Partnership the trading name of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Registered (England) No. 5009271
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