A pension is one of the most tax-efficient ways of saving for retirement.
A Self-Invested Personal Pension (SIPP) is essentially a pension wrapper that is capable of holding investments and providing you with the same tax advantages as other personal pension plans.
The recent volatility of global markets has tested the nerves of even the most experienced investors, making it a difficult time for individuals who rely on income from investments for some or all of their needs.
HM Revenue & Customs (HMRC) confirmed recently that gender neutral income factors will apply to capped income withdrawals. From 21 December 2012, the rates used to calculate the maximum amount of income a female can take from her pension each year in drawdown will be based on male life expectancy rates.
This could result in a significant increase, of around 8 per cent, in the maximum income withdrawal limit available to females.
With so many different protection options available, making the right decision to protect your personal and financial situation can seem overwhelming. There is a plethora of protection solutions which could help ensure that a lump sum, or a replacement income, becomes available to you in the event that it is needed.
A broad spread of instruments
Pooled investments are also sometimes called ‘collective investments’. The fund manager will choose a broad spread of instruments in which to invest, depending on their investment remit. The main asset classes available to invest in are shares, bonds, gilts, property and other specialist areas such as hedge funds or ‘guaranteed funds’.
Estate preservation doesn’t only affect the very wealthy. Rising property prices have meant that it’s now an issue for an increasing number of people. So what are the areas you need to consider to protect your wealth?
One of the principal tenets of spreading risk in your portfolio is to diversify your investments whatever the time of year. Diversification is the process of investing in areas that have little or no relation to each other. This is called a ‘low correlation’.
A worrying number of people in retirement are not utilising their pension savings efficiently, according to statistics revealed by Skandia (30/07/12). This could result in their pension funds being subject to an unexpected 55 per cent tax charge on death. This tax charge could be avoided or reduced in many cases.
An annuity provides you with a guaranteed income for life when you retire. You buy an annuity using a lump sum from your pension or, perhaps, from some savings. Annuities remove the worry about having to budget for an unknown period of time. We can help you understand the retirement process and find the right annuity for you.
The average UK pensioner household pays out 29 per cent of its income in retirement to the taxman through a combination of direct and indirect taxation, which adds up to an annual tax bill of nearly £42bn, new analysis
[1] from MetLife shows (25/07/12).