Typical questions other pension savers like you ask are!

As I’m sure your aware last week saw the introduction of the much talked about pension changes. We have been inundated with phone calls from clients & prospective clients who want to understand their options as we enter this new era of pension freedom.

Have you asked yourself any of the following questions?

  • Do the new rules affect me, even if I’m not retiring yet?
  • When can I start taking money from my pension?
  • Should I take the 25% tax-free cash as soon as I get to age 55?
  • How much tax would I pay on further withdrawals?
  • How exactly do I pass my pension on to my children?
  • Should I move money in savings accounts and other investments to my pension?
  • How do I ensure I don’t miss out on the benefits of the new rules?

Speaking to someone about your options is imperative! Why not do that with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862.

Are you a pension millionaire & you didn’t know it?

Here are a few questions to think about?

  • Did you know that a 54 year old who has been a high earner with 30 years working for companies with a Pension scheme could be sitting on a combined pension pot of £1m?
  • Did you realise that you could convert your pensions into an income whilst protecting the value of the fund for future generations?
  • Did you know that after April 2016 the pension lifetime contribution plummets by £250,000, resulting in you being taxed on money you may not even realise you have?
  • Did you know if you’re 55 or more this year you can protect your pensions against this and even start to get real value from the money you’ve set aside?

Please do have a read of the following article – Who wants to be a pension millionaire? How much would you have to put away each month to reach the £1 million lifetime limit on pension savings? http://citywire.co.uk/money/who-wants-to-be-a-pension-millionaire/a805312

Speaking to someone about your Retirement Options is imperative! Why not do that with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862.

Case Study – Living a comfortable life in retirement!

Background

Having been retired for over 4 years Mr & Mrs G felt now was a good time to review their finances with a view to simplifying matters. They felt the amount of paperwork they had to deal with every year was an unnecessary burden. They had built up significant funds over the years with a number of different companies. Their previous advisor had retired a couple of years ago & they were looking to review their plans to help them clarify their current & future financial position.

Our approach

We arranged an initial meeting where we got to understand their financial situation, their lifestyle & their future plans. Here at Reeves Independent, we believe a great financial plan is central to achieving a more certain financial future. Understanding a clients attitude to risk underpins every financial decision. We do this with a questionnaire & the results help us balance out the level of risk with the expected investment returns to ensure the investment portfolio is fit for purpose.

We reviewed Mr & Mrs G’s financial & life style goals & produced a future cash flow analysis to help simplify their future needs

The outcome

We were able to simplify their investments by aggregating some of their investments into a single investment platform & some into another provider offering smoothed returns. We also simplified the number of tax wrappers used. This was achieved over a few years to ensure we maximised the tax allowances available to them both. Though the process there were also savings in annual charges which was a welcome bonus.

Mr & Mrs G now have peace of mind that their finances are in good order & can enjoy their retirement doing the things they had planned

Does this Case Study sound familiar to you? If you think we could help contact Reeves Independent on 0191 281 9862 or email info@reevesifa.com for a FREE introductory chat!

Pension Lifetime Allowance to fall to £1 million! Won’t just affect highly paid!

Following yesterdays budget the main thing our clients have contacted us about is how does the reduction in the Lifetime allowance going to affect them.

People’s perception is that it won’t affect them. However it is surprising how many people it can affect. Many senior public service employees or people who have been in Final Salary Schemes for years WILL be affected by this change.

Please do read this good article by Mercer below

Pensions Lifetime Allowance to fall to £1 million: Won’t just affect highly-paid! http://uk.mercer.com/content/mercer/europe/uk/en/newsroom/uk-budget-2015-mercer-comments-on-pension-changes.html

If you want to discuss how this change in the Lifetime Allowance affects you then contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

Do you know whether your current pension arrangements and investments could make an early retirement a reality?

What income you need in retirement is subjective of course, and largely decided based on the lifestyle you want to lead and the bills you need to pay. What many people don’t know is whether the funds they have been able to build up can deliver what they require or if not, whether they are prepared to “cut their cloth” according to what their funds can deliver. It’s at this point that good advice is vital, because as my granny used to say “there’s more than one way to skin a cat”. I never really understood why you’d want to skin it at all or what the various methods were, but I did recognise the message….!

New data suggests that people turning 65 this year will need a full state pension and a private savings pot of £121,000 to fund a retirement lasting 20 years. That is based on achieving the average annual income people about to retire expect to get, which at present is £15,800, according to Prudential’s ‘Class of 2014′ research.

Life expectancy of 20 years following retirement is the current estimate provided by the Office for National Statistics – but some people will live even longer and therefore need more money.

If you live 25 years after retiring at 65, you will need a private pension pot of £139,000 to reach the average expected income figure, says Prudential. And if you live another 30 years, that rises to £154,000. Prudential is assuming you fund your retirement through a mixture of the full state pension and an income drawdown scheme, which allows you take annual sums out of your pension pot while the rest stays invested. Its figures are based on the expected growth rate of the Prudential PruFund Growth Fund.

Buying an annuity instead would guarantee you an income for life, but rates are poor and take-up has plummeted since ‘pension freedom’ reforms were announced in the Budget last March

Under Chancellor George Osborne’s pension changes, which kick in next April, people will be allowed to access their whole pension pot from age 55 and be given far greater decision-making power over how to spend, save or invest their money.

Vince Smith-Hughes, retirement income expert at Prudential, said its figures underline the importance of making retirement income decisions that address the risk of outliving your savings.

‘If retirees choose to draw income directly from their pension fund, they need to consider if it’s sustainable to take that level of income over an extended number of years. It is also important for people not to overestimate the value of the state pension as a fall back should they exhaust their retirement pot. The state pension alone is well below the income level most people estimate they’ll need for a comfortable retirement.’

Prudential also highlights how average life expectancy varies across the country. Retirees in East Dorset and Harrow in London live the longest on average – another 22.3 years after they turn 65. *

From 6 April, there will be three options available to individuals taking benefits from their money purchase fund for the first time:

  • ‘Drawdown’ where pot invested and income is taken. Flexi-access drawdown – this is the new form of income drawdown which will allow individuals to take taxable income from their pension fund with no upper limit
  • Annuity- Purchase a lifetime annuity. Under the new rules, lifetime annuities will be able to go down as well as up.
  • Full or gradual withdrawal of money which will be taxed as income – Taking one or more lump sums from uncrystallised funds, known as uncrystallised funds pension lump sum (UFPLS).

Individuals will be able to choose any combination of the above. From April 2015, there will be no cap on the amount of money savers can withdraw in a drawdown scheme.

It is imperative you look at all your Retirement Income Options! Contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

* Read more: http://www.thisismoney.co.uk/money/pensions/article-2728970/Full-state-pension-plus-121k-savings-needed-average-retirement.html#ixzz3UZBsoGze

Case Study! Getting it right at retirement!

We were recently introduced to Mr & Mrs B from a long term client. They were both 55 & looking to retire when met them.

Background

As Mr & Mrs B approached retirement they were keen to ensure they maximised their income & make the most tax efficient use of the assets they have accumulated. Mr & Mrs B held a number of pensions, assets & buy to let properties they planned to use to fund their retirement. They were however not too sure what all their assets could deliver in terms of income& how long it would fund their retirement for.

Our Approach

After an initial telephone call we sat down with Mr & Mrs B & agreed some goals around their lifestyle in retirement before drawing up a planner which focused on their long term retirement aims. This helped demonstrate how different levels of income impacted the amount of legacy they may leave their family.

The Outcome

The result was that Mr & Mrs B could take their dream cruise around the world for 3 months by utilising some of Mr B’s tax free cash from his pension plan. By reassigning some of their assets both can take a retirement income of over £20,000 & remain basic rate tax payers.

Mr & Mrs B now have annual meetings with us where we update and review their lifetime cash flow forecasts & financial plan, providing them with financial peace of mind, to live the life they want, secure in the knowledge that they won’t run out of money

Do this case study sound like you? If so please contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

Additionally please have a look at our core services document or visit our website www.reevesifa.com for further information

Senior Executive? Are you ready for the pension freedom changes?

As I’m sure you are aware in his 2014 Budget, Chancellor George Osborne announced a set of radical pension reforms. A number are already in play, however others are due to come into force in April 2015.

So what are the important changes from April 2015, and how might they affect you?

Freedom to draw down cash

From April 2015, if you are aged 55 or over and have a defined contribution pension, you can either take 25% of your pension tax-free in one lump sum or have 25% of any withdrawals made tax free.

For further information please read AXA’s Lowdown on Drawdown (http://www.reevesifa.com/uploads/Clientdrawdown-infographic-INCAW1007.pdf)

Flexible access to pensions from age 55

From April 2015 pension investors aged at least 55 will have flexibility on how they draw an income from their pension, over and above drawing down the tax-free lump sums. They can:

  1. Take the whole fund as cash in one go
  2. Take smaller lump sums, as and when they like
  3. Take a regular income via income drawdown – where they draw directly from the pension fund, which remains invested
  4. Take a regular income via an annuity – where they receive a guaranteed income for life but lose their pension capital

Please note any withdrawals over and above the tax-free amount will be taxed as income at your marginal rate.

55% pension ‘death tax’ to be abolished

Currently, it is only possible to pass a pension on as a tax-free lump sum if you die before age 75 and you have not taken any tax-free cash or income. Otherwise, any lump sum paid from the fund is subject to a 55% tax charge.

From April 2015 this tax charge will be abolished. The tax treatment of any pension you pass on will depend on your age when you die.

If you die before age 75, your beneficiaries can take the whole pension fund as a lump sum or draw an income from it tax free, when using income drawdown. Dependants can also choose to buy an annuity, in which case the income will be taxed.

If you die after age 75, your beneficiaries have three options:

  1. Take the whole fund as cash in one go: the pension fund will be subject to 45% tax (current proposal).
  2. Take a regular income through income drawdown or an annuity: the income will be subject to income tax at your beneficiary’s marginal rate.
  3. Take periodical lump sums through income drawdown: the lump sum payments will be treated as income, so subject to income tax at your beneficiary’s marginal rate

If you would like to discuss your options then please contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

Additionally please have a look at our core services document or visit our website www.reevesifa.com for further information

November’s most read articles

Hello from Reeves Independent

We hope you are well & looking forward to the festive period

Firstly please do join our Christmas hamper competition! Simply tweet @reevesifa your favourite Christmas present ever using the hashtag #favouritechrimbopresent to enter!

Secondly we know this is slightly earlier than normal but we understand that no one wants to be bombarded with pension & financial articles near Christmas time so we thought we would get this out now!

Below are the most read links from November;

  1. Simon Read: There may be trouble ahead for cohabiting couples  who don’t make a will
  2. Why women should insist on pension savings in divorce
  3. A case for income protection ….
  4. Are you ready to embrace income drawdown after pension freedom in April?
  5. Why cashing in your final-salary pension could be a good idea?
  6. Can you make your pension pot work harder for you? How drawdown works & why savers like it
  7. ISAs v Pensions – where you are in life could influence how your save
  8. Annuities vs Drawdown – which is right for you?
  9. Self-employed? Use your pensions to reduce your tax bill!
  10. “I had to sell my home when I become ill”
  11. For anyone considering Drawdown – Lowdown on Drawdown!
  12. Critical Illness Insurance – what is it & is it worth having?

We hope that you find some of the above useful. If there are any areas that you would like more articles on please let us know as we welcome any feedback

If you would like to discuss any of the above articles & how they may affect you then please contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

Additionally please have a look at our core services document or visit our website www.reevesifa.com for further information

September’s most read articles!

Hello from Reeves Independent

We hope you are well

There has been a number of events & announcements throughout September that will have an effect on people’s investments & retirement plan.

Throughout the month we have posted a large number of articles in our Linked In Group, on Facebook & on Twitter

Below are the most read links from September;

Who benefits from abolition of 55% tax on pensions?

This may apply to some of my contacts! NHS staff could retire early to avoid pensions tax hit!

Is it possible to carry forward unused allowances?

DIY pensions: the six alternatives to an annuity

Auto Enrolment – why you should seek advice!

Avoidance or evasion: Legal and illegal ways to minimise tax Having a second child? Five financial considerations

Seven ways in which the Scotland No vote will affect the UK economy and markets

We hope that you find some of the above useful. If there are any areas that you would like more articles on please let us know as we welcome any feedback

If you would like to discuss any of the above articles & how they may affect you then please contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

Additionally please have a look at our core services document or visit our website www.reevesifa.com for further information

August’s most read articles!

I hope everyone has had a good holiday period

We apologise for the lack of articles on our social media mediums over the holiday period. Hopefully we will be back to normal for the rest of the year

As you know we like to regularly provide our clients & prospective clients with information on the most important financial planning areas. We frequently post articles within our Linked In Group, on Facebook & on Twitter

Below are the most read links from August;

Inheritance tax checklist

Women hitting state pension age before April 2016 can boost their pension pot by 20% if they defer

PENSION REFORMS Free to choose

Pension loopholes: five ways to get money for nothing

Five financial perils of self-employment

Nine in 10 Britons risk financial future by not having a lasting power of attorney

Tax loophole: boost your pension by 88pc a year
How to get the best life insurance policy

‘We have taken out insurance cover to safeguard our legacy’: Six ways to spare your heirs from paying inheritance tax

Pensions clinic: your questions answered

We hope that you find some of the above useful. If there are any areas that you would like more articles on please let us know as we welcome any feedback

If you would like to discuss any of the above articles & how they may affect you then please contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

Additionally please have a look at our core services document or visit our website www.reevesifa.com for further information