Category Archives: Drawdown Pension

The longevity challenge and how to tackle it

In the UK, we are faced with the challenge of an ageing population. Many of us will live longer than we might have expected. Already, 2.4% of the population is aged over 85. Because of improvements in healthcare and nutrition, this figure only looks set to rise.

The Office of National Statistics currently estimates that 10.1% of men and 14.8% of women born in 1981 will live to 100. A demographic shift to an older population brings unprecedented change to the way the country would operate, from the healthcare system to the world of work.

In addition, a long life and subsequently a long retirement, bring challenges of their own from a personal financial planning perspective.

Continue reading

What do you need to consider regarding a defined benefits pension transfer?

Pensions freedoms introduced three years ago mean that people are able to do what they like with their retirement savings. If you are on a defined benefit (DB) pension scheme you may be offered the opportunity to transfer out of your pension scheme in return for a fixed sum.

DB schemes promise savers a certain level of income after retirement, such as a final salary. Transferring out means that you will usually be offered between 25 to 30 times your annual pension value as a lump sum. However, it could be as much as 40 times. For instance, someone on a £10,000-per-year pension could be offered between £250,000 and £400,000. Continue reading

Record numbers make the most of pension freedoms

Hand writing the text: Whats Your Plan for Retirement?

The people have spoken and they love freedom! Recent figures show withdrawals in the 2017-18 year were worth £6.7bn, the highest figure since the pension freedoms reforms were introduced in 2015.

Before the change in legislation, the majority of pensioners would purchase an annuity with their pension pot, which would guarantee them an income for life.The pension freedoms now mean that those over the age of 55 have access to their savings and more choice and flexibility over how they fund their retirement. Continue reading

Using the pension freedoms? How to make sure you don’t run out of money in 16 years.

Recent research has revealed the alarming statistic that around a third of people are now likely to run out of money after they retire, which could result in their children’s inheritance being severely diminished or even disappearing completely. This follows the introduction of pension freedoms in 2015, which have allowed people to withdraw large amounts of money from their pension savings at any time. Continue reading