by Michael Ormond on November 13, 2007
88% of Independent financial advisers predict that the age of retirement will rise within the next 10 years , while 71% say people are already resigned to a significant reduction in their standard of living in retirement.
Increased life expectancy and mismanaged/ plundered pension funds have made this a necessity at some point.
This makes planning for retirement and allocating funds for later life an even more confusing situation as current investors can not make accurate predictions as to the likely value of their investment.
Currently, the State Pension age is 65 for men and 60 for women. However, the State Pension age for women is changing and is due to increase from 60 to 65 between 2010 and 2020.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on November 12, 2007
From the Daily Mail
Tony Blair today rejected Tory demands for bigger compensation payouts for thousands of people whose retirement savings were wiped out.
He clashed with David Cameron in the Commons ahead of a Lords vote where the Government faces possible defeat.
The Prime Minister insisted that existing compensation arrangements, which have so far failed to help some 125,000 pensioners, were adequate.
But the Government’s unity was jarred earlier when its own former chairman of the Pensions Commission, Lord Turner, declared that he backed the calls for a more generous system.
Outside Parliament, an elderly man stripped to his boxer shorts in protest at the Government’s stance on the issue. There was no sign of a threatened rally of nude pensioners.
The furore centres on 125,000 people who paid into company pension schemes only to see them collapse. Under complex rules set by ministers, some victims have had 90 per cent compensation and others were offered less.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on November 11, 2007
Moira O’Neill of the Observer Writes :
It’s time to retire, and you might think you have done all the hard work in building up your pension pot. But converting your nest-egg into income will be the most crucial financial decision of your life.
The traditional way is to use the capital to buy an annuity – an annual income from an insurance company. The rate of income paid by annuities has been on a long downwards slope, but rising interest rates mean there are signs of improvement.
Also known as income drawdown or pension fund withdrawal, these let you draw an income directly from your pension fund while the fund remains invested. The maximum level of income you can draw is about 120 per cent of the level lifetime annuity payable to a single person of your age and sex; the minimum is zero. You can use your remaining fund to buy a lifetime annuity at any time.
Anyone in a personal or stakeholder scheme can use an unsecured pension, apart from those with very small funds. If you want an unsecured pension but your employer’s scheme doesn’t offer it, you can transfer your pension rights from that scheme into a personal pension scheme. However, you may lose any entitlement to a tax-free cash sum greater than 25 per cent of the fund value….
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on November 10, 2007
The lifetime allowance or Standard Lifetime Allowance (SLA) restricts the total amount of pension fund an individual can build up from contributions that have received tax relief; it is set by the Government. It applies to all the different pensions that you hold combined together (excluding the basic state pension and state second pension). Any benefits taken that are of greater value than the SLA, known as ‘excess’ funds, will be subject to a tax ‘recovery charge’. The scale of this charge is designed to take back the benefits of tax relief and growth on the ‘excess’ of the fund.
The SLA of £1.5 million for the tax year 2006/2007 has been set by the Treasury and will increase annually until 2010/2011 tax year when it will have reached £1.8 million. The yearly figures increment as follows:
- 2006/2007 >> £1.5 million
- 2007/2008 >> £1.6 million
- 2008/2009 >> £1.65 million
- 2009/2010 >> £1.75 million
- 2010/2012 >> £1.8 million
Further Treasury Orders will set out the SLA’s from 2011/2012 on. The SLA cannot reduce and there is no legislative commitment to increase it annually.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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