Pension Planning

Pension Planning

Bob, Geoff and Steve are colleagues who work away from home on a 3 month contract cycle of 2 months on, one month off. When they work they receive £3,000 per month but they’re not paid for the month they are off. So what provision do they make for the month they are at home with no pay?

Bob wants to make sure that he and his family can enjoy his month at home so when he’s working he saves £1,000 per month. Bob’s spendable income therefore remains level at £2,000 per month as seen here:

Bob and his family always look forward to Bob’s month off and they always have a great time.

Geoff saves for the month he’s off, but he doesn’t make it a priority like Bob:

Not surprisingly, Geoff’s wife is none too pleased about Geoff’s inadequate savings provision because the family simply can’t make ends meet when Geoff’s at home and their lifestyle suffers severely. Consequently, Geoff and his family don’t look forward to Geoff’s month at home.

Steve saves hardly anything for his month at home which causes untold distress and hardship:

It’s a nightmare when Steve’s at home because the family simply do not have enough money to live on. Steve blames his company and “the stupid system” as he calls it, and he moans constantly about not having enough money when he’s home. But whose fault is it?

Bob, Geoff and Steve’s work pattern is very similar to adult life. We work for 20 years then work another 20 years, then hopefully we enjoy 20 years or more retirement.

So, are you a Bob, a Geoff or a Steve? We’d like to help you be a Bob and furthermore we’d like to help you get the best out of your hard earned savings in order to maximize your income in retirement. Here’s how:

Key Aspects to Pension Planning

• Contributions – Don’t scrimp. Make your pension a top priority, only second to your mortgage, and pay as much as you can into it;
• Investment Performance – Your money needs to be actively managed and monitored to ensure that you get the best possible returns during the years you are saving. Most people have no idea of how well or how poorly their pension fund is performing;
• Income in Retirement – Should you take an Annuity, or go for Phased Retirement or Income Drawdown, and who with?

All these factors will have a profound effect on the amount of income you’ll actually receive in retirement, but none more than your level of contributions. It is therefore absolutely vital that you seek independent advice before entering into any pension arrangement or taking income from a maturing pension.

We offer advice on all Personal Pension arrangements, including SIPPS, and Group Scheme arrangements including Employer Stakeholder Schemes. We are also able to assist with Occupational Pension Transfers for people who have preserved or frozen pension benefits with a previous employer.

Parents and Grandparents

Did you know that you can start a pension plan for your children or grandchildren?

Yes, if there’s a new baby in the family you can actually start a pension for them paying-in up to £3,600pa, that’s £2,808 with tax relief. Just think, when they start work one day they could have already accumulated 20 years or so pension contributions. What a marvelous head start for them.

Non-working Spouses/Partners/Parents

Did you know that you can have a pension plan even though you are not in employment? It used to be that you had to be in paid employment/self-employed to pay into a pension plan but this is no longer the case. You can pay in as much as £3,600pa, that’s £2,808 with tax relief.

*References to contributions and tax relief are as per 2005/2006 rules and are subject to change.

**Hallmark Independent Financial Services does not handle client monies, pension contributions are paid directly to the company concerned by cheque or direct debit.

If you would like to speak with one of our Advisers about personal or business protection, or to arrange an appointment, please call us on LoCall number 08456 120 375 or email us your contact details with a preferred contact time by clicking here.
We look forward to hearing from you.