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Pensions Advice

At Galleon Wealth Management, we understand how difficult it is to work out pension options if you live in Rushmere St Andrew, Ipswich, or the wider Suffolk county. Here, we have come up with a few potential options available to you:

Types of Pension

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Stakeholder Pension

A Stakeholder Pension is a long-term investment that helps you build up a sum of money that can use to provide yourself with an income in retirement.

It differs from other personal pensions as it must meet minimum Government requirements on capped charges and low minimum payment levels.

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Personal Pension

A personal Pension is a long-term investment that aims to help you build up a pot of money that you can use to buy an income when you retire.

You can make regular or one-off payments into a Personal Pension plan and stop, restart and change your payments to suit yourself. It’s a tax-efficient way of investing for your retirement, but bear in mind that you won’t have access to the money in your pension fund until you retire. It’s a tax efficient way for you to invest for your retirement because HM Revenue & Customs (HMRC) adds tax relief to the payments you make into your plan. For example, if basic rate tax is 20% and you make a payment of £160, the taxman will add £40 so the total invested into your plan is £200. This is known as basic rate tax relief.

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Self Invested Personal Pension Plans (SIPPS)

There are in essence, just Personal Pension Plans (PPP). They just have more investment opportunities which in turn, appeal to the adventurous investor.

The fundamental difference is that is that through a SIPP, individuals can literally become their own fund managers and have the facility to invest outside the normal insured contacts with a pension wrapper which incudes share and property.

Annuity

An annuity is simply a series of payments made as selected intervals in return for pension fund. The level of payment is dependent upon age, annuity rate, size of fund and options selected. Annuity rates tend to mirror interest rates since they are related to the returns earned on Fixed Interest Gilt Edge Securities.

Purchase Life Annuities:

A purchased life annuity is a single premium policy that will provide you with a guaranteed income

This can be paid for a fixed period or for the rest of your life.

Enhanced Life or Special Situation Annuities:

Individuals in poor health (or those with known medical condition, i.e. diabetes) may apply for higher annuity rates due to their shorter life expectancy – this is often subject to a medical examination. Some individuals may be offered enchanted rates due to their lifestyle or physical condition, i.e. smoker or clinically obese.

More recent developments have seen the introduction of Special Situation Annuities, which can be based on occupation and postcode. For example, a bricklayer in Yorkshire will be given a higher rate than a stockbroker in Surrey.

In all other respects, these annuities are the same as a Lifetime Annuity.

Drawdown:

Under the option of Drawdown Pension (Previously known as Unsecured Pension Fund Withdrawal) you can choose to immediately take a tax-free cash lump sum and then have further options on structuring income. A pension income does not have to be taken but if this is required under the new pension freedoms, there is no limit to what can be accessed, although long-term sustainability must be considered. This income is taxed as earned income under the PAYE system.