Retirement Planning Advice - Macbeths Insurance Brokers

Start Planning for Retirement Now

In contrast to previous generations people approaching retirement today cannot typically be so confident of their financial security and face an increasingly uncertain future in terms of their pensions.

Latest figures show that average annual income drops by two-thirds (66%) in retirement, meaning the average British person retires with an annual income almost 24% less that of the current minimum wage.

Nearly a fifth (19%) of women within five years of retirement have no private pension and must rely solely on the state pension. Men fare better but many may reach retirement with inadequate pension provision.

As a result, 26% of over-50s are pushing back their retirement date, working longer to afford the lifestyle they had hoped for with the state retirement ages also being increased by the Government.

Currently, the basic State Pension for the 2014/15 tax year is as follows:

State Pension Weekly Annual
Single person £113.10 £5881.20
Spouse/civil partner £67.80 £3525.60
Pension credit- standard minimum guarantee
Single £148.35 £7714.20
Couple £226.50 £11778.00

Retirement planning, therefore, involves thinking about your plans for the future now – and that could mean investing your money with the aim of maximising its value ready for when you retire.

There are many other ways you can save for retirement including pensions, with many people now being auto-enrolled into a workplace pension scheme, investing in the new ISAs (NISAs, introduced in July 2014) and property.

Meanwhile, following a radical overhaul of pension tax rules, drawdown could become an option for some. A drawdown pension allows you to take income from your pension pot while the pot remains invested. You can choose how much pension you want to be paid each year within certain limits.

The Chancellor, George Osborne, also recently announced proposals to abolish the 55% rate of tax payable on death on funds passed on as a pension, instead allowing individuals to pass on their unused defined contribution pension to any nominated beneficiary when they die paying the marginal rate of tax.

Whichever way you choose to save it’s important to have a plan for retirement. And yet, a recent survey found that just 18% of over-50s have seen an independent financial adviser (IFA) about retirement planning.

Macbeth can help you build a suitable plan for growing your retirement fund in a way that’s affordable for you and ensures it’s eligible for available tax reliefs.


Author: admin | January 12th, 2015

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