A huge reform of the defined contribution pension system (as opposed to workplace final salary schemes) announced in Budget 2014 means that under the proposals, from next year, millions of people reaching retirement age will be able to spend their pension pot in any way they want.
More than half of over-55s currently in the workforce are happy to work past the default retirement age of 65, according to new research[1] from MetLife.
Fundamental plans to redesign the UK defined contribution pension system (as opposed to workplace final salary schemes) were announced as part of the Budget 2014 speech. This is the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921, introducing new flexibility to the pensions system.
Women have historically lived longer than men, but this is gradually changing. Life expectancy has continued to increase all round as all generations enjoy unprecedented wealth, better nutrition, healthier lifestyles and the benefits of advancing medical science.
People change jobs and employers change their names, but, more importantly, we all forget things from time to time. With that in mind, it is easy to lose track of pensions that you have paid into over the years. If you do not actively look for your lost pensions, then you take the risk of relying on them looking for you! This can be difficult for them to do if, for example, you have changed your name through marriage or moved home yourself.
Bringing your pensions under one roof
Most people, during their career, accumulate a number of different pension plans. Keeping your pension savings in a number of different plans may result in lost investment opportunities and unnecessary exposure to risk.
Some people don’t want a pension company deciding how their pension savings are invested – they want to control where their money goes and how it grows. In this scenario, a Self-Invested Personal Pension (SIPP) offers a solution. Very much a do-it-yourself pension, you choose what investments you want to put your savings into, and therefore keep control of your savings.
You could soon have a pension without asking for one!
Millions of workers are being automatically enrolled into a workplace pension by their employer. A workplace pension is a way of saving for your retirement that’s arranged by your employer.
There are two main types of occupational workplace pension schemes:
Defined-contribution schemes
A defined-contribution (DC) or money-purchase pension scheme is one that invests the money you pay into it, together with any employer’s contribution, and gives you an accumulated sum on retirement, with which you can secure a pension income, either by buying an annuity or using income drawdown.
Flexible drawdown is a special form of drawdown under which any amount of money can be withdrawn from the pension pot. There are two requirements you have to meet before undertaking this option: you must meet the minimum income requirement (MIR) and you must have stopped contributing to any pensions. As the name suggests, this option is more flexible than income drawdown. Qualifying for this option removes the cap on the income you can take.
Milton Keynes Headquarters: Vizion Wealth LLP,
16 London House, Swinfen’s Yard, High Street, Stony Stratford, Milton Keynes, MK11 1SY. Telephone: 01908 920043.
Registered in England number: OC367088. Vizion Wealth LLP is a Limited Liability Partnership. Vizion Wealth LLP is authorised and regulated by the Financial Conduct Authority.
Vizion Wealth is listed on the Financial Services Register https://register.fca.org.uk/ under reference 565523.
If you wish to register a complaint, please write to info@vizionwealth.co.uk or telephone 01908 920043. A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234 567.
Vizion Wealth LLP cannot be held responsible for the content within any external website or documents that are linked to from this site.
© 2023. All rights reserved. Vizion Wealth LLP
