The UK workforce is getting older and it’s predicted that by 2020, one-third of the workforce will be over 50. Many private pensions can be accessed at 55, yet more and more people are working way beyond this age. In fact, many people are adopting a ‘work until I drop’ philosophy; if you love what you do, then why not?
If you’ve decided that retirement isn’t for you, it doesn’t mean that you can’t still utilise your pensions. After all, you’ve worked hard to build them up so why not make them work hard for you in return?
At Rockwood Financial Solutions, we can help you get the most from your pensions whether you retire or not.
If you’ve worked for various employers throughout your career, then chances are, you’ve collected a few pensions along the way. Perhaps you’ve even lost track of how much each one is worth. Depending what type of pensions you have, it could be better to keep some of them where they are, cash some in or move them all into one pension pot. Our pension specialists can help you understand what you’ve got and talk you through the options for consolidation.
Taking a lump sum
Many pensions allow you to take a 25% tax-free cash lump sum from your pot when you reach retirement age, even if you don’t retire. You might decide to use this to pay off your mortgage, take a luxury holiday, treat yourself to a new car or get some work done on your home. Perhaps you want to use it to help your children put a deposit on a house, pay for a wedding, start a business or go to university. However, you don’t have to take the lump sum so, before you go on a spending spree, make sure this is the right decision for you. Don’t leave yourself short later in life.
Reducing your working hours
Once you reach 55, you may be able to start drawing on your pension, depending what kind of pension you have in place. This could allow you to reduce the number of hours you work without changing your monthly income. The reduction in salary could be topped up with drawings from your pension. This isn’t the most suitable option for everyone and will also depend on how flexible your employer is prepared to be.
Increase your income
Rather than reducing your hours, you may decide to carry on earning a full-time salary but adding a monthly income from your pension to that total. An increased income could allow you to have those extra treats each month or make higher mortgage repayments. If you are considering this option, then be careful not to push yourself into a higher tax bracket with the extra income. A Rockwood adviser can help you work out if this is the right option and how much of your pension to draw each month.
Protecting your family’s financial future
Changes to pension laws now allow for some pensions to be passed to your family after your death. Check your pensions allow you to do this and make sure you have a will in place. If your total estate is high-value, then it could be subject to inheritance tax. A Rockwood adviser can make the necessary calculations and help with inheritance tax planning.
Find out more
Whether you plan on retiring or not, financial planning will help you ensure you get the most from your pensions and investments. Rockwood Financial Solutions will work with you to put a financial strategy in place for you and your family. Give us a call to speak to one of our friendly advisers and find out how we can help you.
Nothing in this blog constitutes financial advice or recommendations, for more information please contact Rockwood Financial Solutions on 0330 332 2679.
Don’t wait until it is too late. Speak to our friendly team and start planning for yours and your family’s financial future now. Contact Rockwood today to find out more.
At Rockwood we’re passionate about pensions and can help you understand what your options are. Whether you have one or several pensions we can review them for you and explain the advantages and disadvantages of consolidation. If you do decide to switch or consolidate we can help you chose the pension scheme that is right for you. This will be based on your circumstances now and the lifestyle you want to achieve in the future. All of our advice is completely impartial. If you’d like advice on existing pensions or setting up a new pension then we’d love to help. Contact us today to start making the most out of your pensions now.