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Thinking About Pensions?

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Drew Huskisson

Whether you’re just starting to think about your retirement, are about to retire, or have been retired for some time, MoneyHelper backed by the Government’s Money and Pensions Service is available to help you.

Most people get some State Pension. It is paid by the government and is a secure income for life which increases by at least the rate of inflation each year.  You build up your entitlement to the State Pension by making National Insurance contributions during your working life. In some cases, you can do this even when you are not working, such as when you are bringing up children or claiming certain benefits.  From April 2016 a new flat-rate State Pension was introduced.  For more information see our guide on the State Pension

https://www.moneyhelper.org.uk/en/pensions-and-retirement/state-pension/state-pension-an-overview?source=mas

 

Most defined benefit pension schemes have a normal retirement age of 65.  If your scheme allows, you might be able to take your pension earlier, but this will reduce the pension you get quite considerably. When you take your pension you usually have the option of taking some of it as a tax-free cash sum. How much you can take will vary depending on your scheme rules, but often you can take roughly up to a quarter of the value of your pension benefits like this. Reducing the amount of tax-free cash, you take might increase the amount of income you receive. It is possible to transfer your defined benefit pension to a defined contribution pension which would then allow you to access your pension more flexibly. However, consider this option very carefully as you might be giving up very valuable benefits. Before going ahead with a transfer from this type of scheme speak to a regulated financial adviser.  You can find Financial Conduct Authority (FCA) registered financial advisers who specialise in retirement planning in our retirement adviser directory.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/find-a-retirement-adviser

 

Be careful, also, that the scheme you are transferring to is not a scam.  See our guide how to spot a pension scam.

https://www.moneyhelper.org.uk/en/money-troubles/scams/how-to-spot-a-pension-scam?source=mas

 

With a defined contribution scheme, you build up a pension pot which you can draw an income from when you cut down or stop working. But you must be aged at least 55 before you can start to take money out. With this type of pension scheme, you can usually withdraw at least 25% of your pot tax-free.  Once you reach 55 you are able to access your pension pot.  However, the longer you leave your pot to continue building up, the more money you will have to live on in retirement. To understand the choices for using your pension pot, use Pension Wise – the free and impartial service backed by government.

 

Pension Wise                                                                   Image removed.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Appointment booking line: 0800 138 3944

 

Pension Wise offers a free appointment to anyone over the age of 50 with a defined contribution pension, where they can talk through the available options on claiming their pensions savings, what things to think about and how to avoid falling victim to a pension scam.