5th June 2015 at 10:18am
Changes to pensions and savings (pension freedoms) from 6 April this year give more choice and flexibility over how and when you can take certain types of pension from the age of 55. The changes also mean pension wealth is now more easily passed down the generations.
Whether you’re saving for your future, about to retire, or already enjoying your post-work life, getting plans in place will help put you in control.
10 tips to help you make the most of your pension savings.
1. Lost track of any pensions? Get free help to trace them here
2. If you have several pensions, consider combining them into one to keep an eye on what they’re worth and how they’re invested. Check whether it’s suitable for you – some pensions come with guarantees which you might want to keep.
3. Make the most of your work pension. Your employer may match some of your savings and if you can save even a little more, it all adds up. And, for every £80 you save, it’s topped up by £20 thanks to tax relief.
4. Plan who inherits your pension: It’s now easier to pass pension wealth on and some pensions can be inherited free of tax. Be aware that your Will doesn’t usually control your pension, that’s down to your provider who will look at your Beneficiary Nomination form when deciding who to pay your savings to. You can fill in a form or go online to do this. It’s also vital to keep it up to date as your circumstances change.
5. Talk to your family about inheritance issues. It makes sense to work through major decisions together.
6. Check how your pension savings are invested to see if they still suit you. Unsure? Speak to an expert.
7. If you’re approaching retirement and have an ISA or other savings, it could be worth moving them into your pension to make the most of tax relief.
8. Be aware of pension scams: the new pension flexibilities also give scammers more opportunities. Be wary – if something sounds too good to be true, it probably is.
9. Think about how you might want to access your savings in retirement. You’ll have a choice of taking cash, keeping savings invested, drawing a flexible income, buying a fixed income, or a mix of these.
10.Review your retirement plans with your financial adviser, if you have one, in light of the new rules. If you don’t, consider whether you’d benefit from seeking financial advice. There are also lots of tools and guidance available online to help you make informed decisions.
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This blog and any responses to comments are not financial advice. A pension is an investment. Its value can go up or down and it may be worth less than you paid in. This blog is only an illustration and other approaches are possible. Tax and legislation can change in the future and this represents our understanding of the rules in June 2015.