Tag Archives for " pensions "

Low interest rates are killing chances of a decent income in retirement

Some believe that rates are at their lowest for more than 25 years - but Reeves can help


Low interest rates are making it hard

Last month it was reported that annuity rates had plummeted to a 25-year low – however, some believe that interest rates are at their lowest for a much longer time than that. In the 1990s, £100,000 would have bought a 65-year-old an income for life of about £10,000 a year- today it will buy little more than £4,000 a year.

It’s worse than that - those are not inflation-protected annuities. If you want an income that will maintain its value over time, then that £100,000 will buy you an income of somewhat less than £3,000 a year. Essentially, you’ll spend your career scrimping and saving, worrying about the future. To get together a seemingly large pension pot of £500,000, and what you'd currently receive is a pension of less than £15,000 a year.

Lower interest rates have driven the most recent decline. It is also the reason behind the long-term decline, impacted further by the financial crisis in 2008. 

The consequences of this shift, though, are far more fundamental to our system of pension saving than either government or those of us desperately trying to save for our old age seem to appreciate.


It's going to be harder for younger people to save in the future

With traditional salary-related occupational schemes becoming scarce outside of the public sector, most of us don’t have a great chance in replicating the comfortable incomes enjoyed by many of today’s retirees.

Astonishing as it may be, the fact is most pensioners today are financially better off than they were during much of their working life. Once you take account of housing costs and the costs of bringing up children, they have a higher disposable income in their late sixties than they had when they were in their forties.  Today’s 40-year-old's should not look at their parents’ generation and expect anything remotely similar.

These low interest rates have had an even more fundamental effect on our system of private pension provision, though.  

''Despite these tough times, Reeves Independent can help you.''

Of course, at first glance, it makes for grim reading. However, it may not be as bad as it seems. Reeves Independent are experienced financial and retirement advisers. Yes, the facts above are true. But that doesn't mean you can't have a healthy retirement income.

The era of many retiring in their early sixties on a sizeable pension, possibly, will soon be over. In the future, due in part to these low-interest rates, you may have to work beyond 70.

However, no one can predict what the case will be. At Reeves Independent, we don't work on assumptions. We work on tried-and-tested research methods, industry leading communication and recommending regulated products and funds that we believe can get the best potential returns for you. We firmly believe that through proper monitoring and analysis of market movements and trend analysis we can make the right recommendations to yield a better return from your investments.

Through smart decision making and sound recommendations we believe we can set attainable, realistic goals for you - and that you can potentially retire well before 70.

Reeves Independent work hard to make sure we can get the best results for your portfolio.

To start your free initial review of your pension situation, click the button below.


This article was taken from The Times, written by Paul Johnson - Director of the Institute for Fiscal Studies. These articles are for information only and are based on specific client circumstances which may be different to yours. No advice should be conferred from the articles. No action should be taken without independent professional financial advice as any actions on your pension may be irrevocable and have a big impact on your income in retirement.

A guide to crystallisation

Crystallisation may seem like a minefield - but it's very simple


Crystallisation will become very clear to you

Many people don’t realise what crystallisation means. It may sound incredibly complex, but it’s very simple.

The term ‘crystallised’ simply refers to the benefits you can start to take, and spend, from your pensions.

If your pension is uncrystallised you can’t touch it. The quantity crystallised is the amount of your pension used to start paying your pension income, plus any amount used to pay you a tax-free lump-sum.

To undertake phased crystallisation, Reeves Independent advise you to only crystallise enough of your pension for the income you need - your pension is not a bank account. As always, we want to make sure you make the smartest decisions possible and remain flexible in your approach to your investments and pension. We review this with you twice-a-year to ensure you maximise allowances and keep your retirement on track.

''The term ‘crystallised’ simply refers to the benefits you can start to take, and spend, from your pensions.''

Caroline Chambers is a 56-year-old Senior Line Manager for a telecommunications company. She recently became a grandmother and wants to make sure she spends as much time with her new granddaughter and help her son with childcare. As such she drops down to 3 days-a-week. She has £20,000 from income but will need another £10,000 to cover her expenditures.

The way to arrange this is to crystallise £40,000 of accrued, untouched pension. By doing this £10,000 can be paid out to Caroline – this can be done as a one-off payment or one a monthly basis. £30,000 can then be moved into a flexi-access drawdown pension. This way the money is still invested and within a pension wrapper – it’s a win-win situation.

However, if withdrawn from a pension pot, it’s subject to a marginal rate of tax. By leaving the money in an accrual pension, and not touching it for as long as possible, less tax will be paid for the longest time possible.

It’s certainly a huge benefit to consider – Reeves Independent can help you to get the most out of your investments.

For a free, no obligation review, click the button below.


Names have been changed to protect identity. These articles are for information only and are based on specific client circumstances which may be different to yours. No advice should be conferred from the articles. No action should be taken without independent professional financial advice as any actions on your pension may be irrevocable and have a big impact on your income in retirement.

Five pension avoidance scam tips!

A fifth of people over 50 have been targeted by pension scammers, according to research from provider Retirement Advantage. Here are 5 tips to ensure you beat the scammers

1. An offer to help you access your pension savings before age 55. It is only possible to do this in rare situations, for instance if you are very ill, so be careful and always check with your pension provider.

2. A recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it. There are significant tax implications if you take lots of your savings in one go, so check the tax position before you make any decisions.

3. Warnings that the deal is limited and you must act now. Choosing the right retirement income product(s) is a big decision and shouldn’t be done quickly or under pressure.

4. An encouragement not to get professional financial advice or talk to Pension Wise. An adviser would be able to explain the rules and tax implications of different options and help you make the best choices for your personal circumstances, so be very suspicious if this is discouraged.

5. Contact by somebody who is not on the Financial Conduct Authority (FCA) register. The register is a public record of all the regulated firms and individuals in the financial services industry, including retirement income providers and investment companies.

Always seek professional advice regarding your pensions!

Speaking to someone about your pension options is easy with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862 for a FREE initial conversation!