Trazer Farnese highlights the 6 most asked questions.
1. How much money might my State Pension be?
The full amount of State Pension is currently £168.60 a week, but it’s important to check your State Pension online. It will tell you the amount you’re predicted to get, and the date you’ll reach State Pension age under the current rules. You can check here.
2. Should I get financial advice before I retire?
Throughout your working life, you could have accumulated several pension pots, with different providers. You will want to make sure you are armed with all the information to make the right decision for you.
Under many defined contribution schemes, retirees have the option of withdrawing the entire value from the age of 55. Whether this is the right thing to do depends very much on individual circumstances so independent advice could be beneficial.
If you are considering transferring your defined benefit pension over to a defined contribution scheme, you are legally required to consult a financial adviser if its valued greater than £30,000.
3. How long will my money last?
How long your money lasts will depend on a range of factors, from your desired income, to how much you’ve got saved and your life expectancy. In 2018, research from the Office for National Statistics (ONS), found that an average 65 year old could be expected to live for another 22.8 years, giving them an average life expectancy of 87.8 years. At Lovewell Blake Financial Planning, we can help you build a strategy tailored to your personal situation, using our Cash Flow Modelling expertise.
4. How much money do I need to retire?
The answer to this really does vary by individual. It depends largely on your income now and the lifestyle you want in retirement. Which, recently conducted a study and found that the average couple needs just £18,000 per annum just to cover essentials.
5. Should I buy an annuity?
An annuity is an insurance product that provides you with a guaranteed income for life and until recently, was the most common product purchased at retirement. However, due to pension legislation changes, there are now more flexible pension options available which you should consider before you make important retirement decisions.
6. Can I take a lump sum from my pension?
The rules for taking a lump sum vary depending on the type of scheme you have. You can normally take up to 25% of a defined contribution pension tax free once you pass the age of 55. However, the rules of a defined benefit pension scheme can be more complicated.