Page 38 - Phonebox Magazine November 2014

For most of the time that private pensions have been available the rules have been very strict. Originally an annuity had to be purchased and on the death of the annuitant (or their spouse if there was a widow(er)’s benefit) the pension ended. Any options within the annuity had to be selected at outset and the income was usually fixed or increased by a set percentage each year.
Since the early days the options at retirement have come a long way. There are now far more annuity options, allowing annuity policies that can still benefit from investment growth as well as those that can be purchased on a shorter term basis rather than for life.
Perhaps the biggest change, however, was the introduction of Phased Retirement and Income Drawdown. In simple terms, Income Drawdown allows you to leave your pension fund invested and hopefully still benefit from future investment growth. You also do not need to allow for a widow(er)’s benefit as the fund is available for the surviving spouse to take an income from if required.
One of the biggest bugbears surrounding annuities has always
been that the fund dies with you (or your spouse). As a result, large pension funds can be lost after years of accumulating them.
One of the most important features of Drawdown is that you are now able to leave your remaining pension fund to your beneficiaries, albeit subject to tax at 55%. If left to charity, this tax is avoided altogether and we have certainly seen an increase in clients using this method as an effective way of leaving bequests.
Of course, with greater choice comes greater decision making and ensuring that you take the right course of action for your circumstances becomes more difficult. If you would like to discuss or review your retirement options then please call us. We do not charge for Initial meetings 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 undertake any course of action mentioned without consulting a relevant professional. Please note that tax advice is not regulated by the Financial Conduct Authority.
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Finance Matters
Are you aware of your Retirement options?
What would your future hold if you could make your money go further?
...if you had invested £1,000 in the best performing IMA 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.
Our financial advisers will help you to:
• ensure you have a clear financial plan for the future
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• protect your estate for your beneficiaries
...and give you access to ongoing advice and support
Speak to the experts...
Speak to Advison now on 01908 285690
www.advison.co.uk
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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