It is widely reported that women are more likely to have a shortfall in their savings at retirement. This is typically a result of can largely be attributed to lower lifetime earnings, as a result of caring responsibilities, taking time out for raising families, and the gender pay gap. However, it is also recognised that historically women have been less engaged in investing; statistically they are more risk averse, often hold more in cash and are less likely to seek professional advice.
Lifestyle strategies were first introduced in the 1980s and remain the default investment style of choice for most employers with Defined Contribution pension schemes. Lifestyle profiles initially invest in growth assets which can have more risk attached to them and, as the member approaches their nominated retirement age, funds are progressively switched into less volatile fixed interest investments, such as cash and gilts. Ultimately they are designed with aim of using the pension to purchase an annuity at retirement; the ‘de-risked’ funds shelters the portfolio against markets falls immediately prior to retirement.
The focus of our work at Tideway is advising our clients on generating a tax efficient income in retirement. We ensure the investment portfolio is suitable, well diversified and is generating the income and growth required for clients to draw the required income in retirement.
Over the last year we have seen a lot of changes because of the Coronavirus pandemic, and as a result we have seen an increase in redundancies across industries. If you find yourself in this position you may have been offered a redundancy package and be wondering how best to utilise it. Depending on how much you have been offered, you have several options.
It’s generally known that personal biases exist in us all which can lead us into an emotional state where we could become vulnerable when making sound financial decisions. It is fair to say that the last 12 months has created a backdrop of uncertainty; events such as Brexit and Coronavirus has impacted our emotions and generated a shift in people’s underlying moods.
At Tideway, we often talk about generating tax efficient income in retirement and indeed, much of our work is centred around providing this advice. However, what do we actually mean by this? This note aims to cover the basic points and provide practical steps that can be taken to reduce your tax and maximise your income.
When mentioning an offshore bond to a client to help improve their tax efficiency, there is a unanimous negative reaction to the word “offshore”. However, an offshore bond is not a tax avoidance scheme or an aggressive tax planning product. It is a well-trodden financial planning tool, supported by UK tax legislation applying to insurance policies that is well proven and has been used by financial advisers in tax planning for many decades.
Having seen portfolios fluctuate throughout 2020 and reading our market updates, you will by now have a much better idea about the work and effort that we put into providing and maintaining portfolios for you and all of our clients.
Many of us will be using this extra time at home or the Christmas break to complete our tax returns. It is too late to change your tax bill due this January; now is the time to speak with your adviser on how you can make a difference going forward!
Long gone are the days when you have the same employer for life; typically an individual now has 6 different employers throughout their career, with each workplace offering a separate pension scheme arrangement. This creates a number of unknowns; what is the value of my pot, who is managing my money, what are the costs involved, where is the fund invested and how much risk am I taking?
Retirement planning can be complex, and you should not have to face large financial decisions that impact your future on your own. Proactive planning with someone you can trust will keep you on track to have the retirement you want.
Here at Tideway, we get asked a range of questions relating to pension advice and pensions transfers and one of those is: can I cash in my pension before I’m 55? The answer is fairly straightforward, but there are some exceptions as well as some things to bear in mind which are explored in this article.
It is just over five years since Pensions Freedoms were announced in the 2014 budget. This new freedom allowed the public to re-evaluate how they could access their pensions and, as a consequence, interest in DB transfers grew. So, now is a good time to reflect on those five years, assess how clients who transferred have fared and review the outlook for transfers today.
It’s common knowledge that annuity rates are presently low, making annuities an expensive way to convert your pensions savings into lifetime income at retirement. But just how low are they?
A key attraction of taking a DB transfer for some members is getting access to a tax-free cash sum, often significantly bigger than available from the scheme and several years early; then having the option not to take a pension but to carry on working. Nigel (not his real name) did exactly that with advice and help from Tideway in 2017. Our case study looks at why he took the transfer offer, what he did with the funds and how his and his family’s position are panning out.
Most of us are entitled to a state pension and as a couple who have both worked and paid national insurance contributions you could anticipate as much as £17,600 p.a., although for those still in the 50’s these won’t be paid until age 67. For some who take defined benefit transfers in their mid 50’s the transfer can provide both a bigger tax-free cash sum and higher income (than the scheme pension) in the early years, with flexibility to reduce it later in life. This allows them to smooth out their income to include the state pensions, sometimes called ‘bridging’ to the state pension age.
Mark (not his real name), a Tideway client who transferred with us in 2016, is doing just that.