2 – How much will my State Pension be? Most people will be entitled to an old age pension provided by the State. The amount of this pension is not the same for everyone and will depend on your employment history and when you were born. Remember the State Pension is designed to cover only a very basic standard of living without any luxuries.

3 – What other savings do I have? As well as savings in pension plans we may have other types of savings, for example bank saving accounts, premium bonds or ISAs. It may be better for you to take money from other savings first before drawing from your pension plan. If you own your home you might think about selling or renting it out to fund your retirement but remember you will still need somewhere to live!

4 – What are my future financial needs and how are they going to change? Think about your living expenses, such as housing and family costs, and how these will change over the next 10, 20 and 30 years. Remember to budget for things like holidays and expenses such as car and house repairs. If you have debts then you may decide to use some of your retirement savings to pay them off, particularly if you are paying high rates of interest. Your financial needs are likely to reduce as you get older and become less active but then your ability to work also reduces. Bear in mind that in later years costs could increase as you may need to pay towards long term care for you or your spouse.

5 – How can I minimise my tax bill? Most people enjoy a personal income tax allowance each tax year and this usually changes each year. You should think about taking your retirement savings in a way which makes the most use of your personal tax allowance so you don’t have to pay tax unnecessarily.

6 – Should I buy an annuity? An annuity is a promise by an insurance company to pay you an income for the rest of your life. You pay the insurance company to give you the certainty of income each month or year – regardless of how long you live or investment performance. Some annuities provide for payments to be made to a surviving spouse or dependant after your death. You should check the terms of the annuity before you commit as they cannot usually be changed afterwards. It is worth shopping around different insurance companies before you buy as prices can vary.

7 – Am I being scammed? Unfortunately there are some dodgy people around who would love to get their hands on your money and some people have already lost most of their retirement savings through scammers. Be very wary if someone is encouraging you to take your retirement savings or invest your money with them. If what they are offering you seems too good to be true, it almost certainly is!

8 – Will taking my retirement savings impact on my welfare benefits? If you are receiving state benefits or Tax Credits then taking your retirement savings could impact on the level of those benefits. This is a complicated area and expected to change in the near future. Make sure you understand how your state benefits, tax credits or long term care needs would be affected before deciding to access your retirement benefits.

9 – What happens when I die? If you die before you reach 75, any money left in your pension plan will be paid to your survivors free of any tax. If you die after 75, money paid to your survivors may be subject to tax depending on their circumstances. Retirement savings which remain in pension plans are not normally counted for inheritance tax purposes. If you buy an annuity then the benefits payable after your death will depend on the terms of the contract with the insurer.

10 – Where do I go to get more help? Taking your retirement savings is a big decision and not one to be taken lightly. If you have any queries, please get in touch with us directly and we’ll be happy to help.

The post Ten questions to ask yourself about the new pension freedoms appeared first on REGINERT.

A recent survey from Aegon found that whilst people continued to have positive aspirations for retirement, there was nevertheless a widespread lack of confidence that retirement would actually deliver.

With careful planning though, you can address all of your potential concerns and ensure you are ready for a happy and productive retirement. Below, we look at some of the the most common retirement worries and how they can be mitigated by having one eye on the detail.

1 – Will I have enough funds to last throughout my retirement?

The best financial advice and careful planning is absolutely key here, especially in light of the far-reaching Pensions Reforms that come into force from 6th April. Having greater control over your pension means yet more serious decisions to make. New retirees are faced with a complex range of choices as it is, often having several pension pots to juggle and likely scenarios to plan for. Not all pension providers are intending to adopt the new flexibilities and transferring to new plans can take weeks, so carefully working out what you have and what you want to do with it is key.

2 – What if my health fails?

Your health is paramount to enjoying a good quality of life. Private health insurance schemes can often give peace of mind, but choosing the wrong one can be costly. A recent study found that one in four of us will require care in later years and the cost can be astronomical (1 in 10 of us will incur costs over £100k). The Government’s new care capping rules for 2016 will also have an impact. Preparing for and thoroughly planning for the worst whilst enjoying the best of your retirement is both prudent and very possible.

3 – Will I get bored and lonely?

Retirement should be the time we get to do those things we have always dreamed of, but if you haven’t settled on a bucket list and are worrying about stagnating in your leisure days, why not retire in a staged manner, cutting down hours to part-time as you gradually accustom yourself to the change? Many retirees favour this approach as it keeps them mentally and physically active, they continue to feel useful and the income is always handy for those future plans!

4 – I might be fleeced by a scam artist!

The most radical change to the pensions industry in a generation has unfortunately spawned a number of opportunists out to fleece savers. An increased number of unregulated investment firms are actively pursuing over 55’s and their newly free pension savings. High-earning professionals, you may be surprised to learn, are the most likely to fall victim. Always make certain that the firm you are dealing with is regulated by the FCA and get in touch with the regulator directly if you are uncertain.

5 – The Unexpected

Everyone fears the unknown and no matter how sensible we are and how much preparation we do, we cannot plan for every eventuality. The recent financial crisis, for example, dented the confidence of many. The only sensible approach is to make sure that your investment portfolio has a balance of risk appropriate to your own approach. Having your finances in order and having someone to turn to for financial advice at difficult times is priceless.

The post 5 Key Concerns for Retirees appeared first on REGINERT.

Highlighting latest sales figures which show it has seen the biggest sale of any retail financial product in Britain’s modern history, the Chancellor confirmed that the pensioner bonds will now be on sale for 4 months, until 15 May 2022. £7.5 billion of the 65 plus pensioner bonds have been sold so far, with over 610,000 savers purchasing bonds since their launch in January this year.

With an investment limit of £10,000 per bond per person, the bonds are available directly from NS&I by post, phone or online. While the formal projection for the total amount of 65 plus bonds that will be sold will be provided in the next Budget – which is in line with usual practice – the government now expects that the total issuance could be around £15 billion of these products, with the total number of savers benefitting from the bonds expected to top 1 million. The government had originally allocated £10 billion for the pensioner bonds.

The confirmation that the 65 plus bonds will remain on sale until May 2022 does not affect those savers who have already taken the opportunity to invest in these market-leading products, if they have already invested up to the available limit of £10,000 per bond per person.

It’s not surprising that pensioner bonds have been successful, at least measured by demand, when they pay risk-free market-beating rates of interest. The Government is thus choosing to borrow expensively from pensioners rather than cheaply from pension funds, and the Chancellor says that this will cost the taxpayer “several hundred million pounds”.

We are told that a key part of the government’s long term economic plan is to support savers at all stages of their lives and help hardworking people secure their financial futures.

The post Pensioner Bonds availability extended appeared first on REGINERT.

When sitting down to plan your retirement budget, it’s a good idea to first get some idea of your current spending. A report by ‘Which’ suggests keeping three months’ worth of bank and credit card statements, payslips going back three months and three months of shopping receipts – remembering to factor in one-off spends like birthdays, Christmas, holidays and car repairs. Then work out where you think you’ll spend more once you’ve retired – because your situation is changing so will your spending habits. You’ll need to compare this with how much income you’ll be getting in retirement (from pensions, benefits or savings), to find out if there are any shortfalls.

The above simple plan is a long way off proper financial planning, but it should provide a handy starting point for indicating the income you might need in your retirement. Once you know that, we can set about working out exactly what you do need to make sure you can do everything you want in your later life.

It is also worth bearing in mind that the sums of money you spend on certain things can change for the better in retirement. The following are again good suggestions to start considering.

• Have you paid off your mortgage? If so, that will significantly reduce your monthly spend. However, if you’re still renting in retirement, you’ll have to factor that cost into your outgoings when budgeting.
• Have your children moved out? Raising a child until they’re 18 costs almost £220,000 in total – so your costs should come down significantly once they’ve flown the nest.
• You’ll save on commuting. The average annual rail cost of commuting into London is £3,800, and that’s without factoring in parking at train stations.
• Public transport. Over-60s get free off-peak travel on buses. And if you live in London, you can claim a Freedom Pass, which means you can use London’s public transport for free.

Some spending in retirement can typically go up, however:

• Leisure spending – you’ll probably be spending more money on hobbies and holidays. Think about how many holidays you’ll want to take per year and remember to take advantage of senior discounts on dining out and theatre tickets.
• Travel insurance – Which? research has found that people over 65 tend to pay more because statistically, they’re more likely to fall ill whilst on holiday. Shopping around will help secure you the best deal.
• Heating. As you’ll be spending more time at home, the chances are bills will be higher. The Winter Fuel Payment, currently available to people born on or before 5 July 1952, could get you between £100 and £300 tax-free towards your fuel bills.

Planning for Retirement needs to go beyond this sort of initial informal research to fully include careful attention to Lifestyle Planning, but the above initial considerations should help you to start thinking about whether your current savings are going to be enough to do everything you want to do with your retirement.

The post How much money do I need in retirement? appeared first on REGINERT.

Cashing in

If you qualify, you might be tempted to cash in your pension. That’s understandable, particularly if debts are a concern – recent estimates show that nearly a third of homeowners after the age of 61 will still be paying their mortgage off. But if you’re really keen to get your hands on the cash, even if it’s just because it feels good to have the cash now – you need to think carefully about the risks and your longer term needs. After all, since we’re living longer, it might need to last for at least a couple of decades.

Preserving your savings

Cash is not always king if you’re keeping it for the long term. Certainly in an era of low interest rates and returns on cash savings, inflation can wipe off value. Without any improvement in interest rates, £30,000 could be devalued to just over £24,512 after 10 years, assuming you spend the small amount of interest you gain and the inflation rate is 2%. That’s why many people opt for investing in the stock market, when it comes to longer term savings. It gives you access to better potential growth. Worth taking the risk?

No wonder the recently opened and extended offer of ‘Older Person Bonds’ by the Treasury has attracted so much interest.

If you are looking to take more control and responsibility for your retirement savings planning in April, it is definitely recommended that you speak to an expert to get guidance on your own personal situation and a good idea on what will deliver the best solution for you.

The post Cashing in or Keeping your Pension Pot? appeared first on REGINERT.