IFA – Pensions

Detailed advice ensured the decision I made to switch out of my Defined Benefit Pension scheme was 100% right for me

Switching my pension out of a Defined Benefit Pension Scheme was one of the biggest decisions I have had to make.

Working with Phil Casey and the team at Focus I felt that every aspect of my personal situation was considered and the detailed advice I was presented with ensured that the decision I made was 100% right for me.

I am delighted to be a FOCUS client and am confident that going forward we will work together to maximise my investment.

- Jack Miller

Pensions Freedom – a success??

Hundreds of thousands of savers have cashed in £9.2 billion from their pension pots since pension freedoms were introduced in April 2015.

Over 1.5 million payments have been made using pension freedoms, with 162,000 people accessing £1.56 billion flexibly from their pension pots over the last 3 months, according to HMRC figures released in January 2017.

So, does that make Pension Freedom a success? With added flexibility comes added responsibility, so are people taking advantage of this new legislation to allow them to manage their finances in a more efficient way – or are they simply robbing Peter to pay Paul?

Let’s just briefly recap what happened in April 2015. The Chancellor of the Day, George Osborne, announced that people will be able to access their entire pension at age 55, with no limits as to how much they could take. 25% could be taken tax free with the other 75% taxed as income. The other key point was that this option was only made available to those people in Defined Contribution plans (or Personal Pensions, as they are commonly known). Those people in Defined Benefits or Final Salary type arrangements would have to transfer out to gain these benefits.

Whilst there were other changes around death benefits and succession planning, this ability to withdraw all of the money was described as one of the biggest changes in Pension Legislation ever.

So, what have people done with the £9.2Bn that has been withdrawn?? Well, to be honest, we don’t really know.

HMRC confirmed that the average withdrawal was just £6,000, which implies that it was either people encashing a small pension pot or they were taking a small withdrawal from a bigger pot. It does at least confirm that people aren’t withdrawing large sums to buy Lamborghini’s, which was one of the biggest challenges offered to this legislation change. But with longevity becoming more and more of an issue, people’s pension funds need to provide an income in retirement for longer and longer.

Therefore, whilst it may be tempting to release some or all of your pension fund, do make sure you take advice from a qualified individual. Because, as always, added flexibility always brings added responsibility.

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

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Clear, concise retirement planning advice

Phil Casey provided clear, concise retirement planning advice and excellent service.

I would recommend Phil and Focus to anyone.

- Graham Beith

Phil provided me with unbiased advice

Phil Rouse took the time to understand my retirement planning needs and listened to my concerns.

He provided me with unbiased advice to optimise my financial future.

- Margaret Drysdale

Are pensions coming back in to fashion?

What goes around comes around.

Do you remember the time when people valued pensions? As we enter 2017, it may just be that pensions are ready to return to the limelight.

The last few years have been a bit difficult for pensions. Interest rate reductions mean that the income provided by pensions through annuities were perceived as poor value and continued legislative changes made them more and more complicated. Further to that, flexible employment meant that many people simply decided to look elsewhere for their income in retirement, either through simply investing in different assets such as property, or different vehicles such as ISAs.

But the recent announcement in the Budget Statement confirming that many Salary Sacrifice arrangements are going to be taxed as if they were income means that the humble pension plan is starting to rise to the top of the pile again. So many of the things that pushed their way in front of pensions are now being taxed more heavily than before. Then add in the new pension Freedom rules that make pension planning and distribution of the income more flexible than ever and you begin to see why its time to be positive about pensions.

And for Company Directors, the need to consider pensions is even more pressing.

The Salary Sacrifice changes that will come about from April 2017 already put pressure on a Director remuneration package that is now also being hit by Dividend Taxation for the very first time. This was introduced in April 2016 and has made Dividends much less attractive (although still better value than taking the money as income). The combination of these two new pieces of legislation means that a Company pension contribution, which is deemed as a Business Expense, so reducing their Corporation Tax bill, is now starting to look very attractive.

It becomes even more attractive when it is paid to the partner of the key Director of the business, which in many cases is the wife. Many Company Directors will employ their wife as a Director of the same business, yet she will often have overall pension benefits that are much lower than her husband. This becomes an issue at retirement, when the wife will still have a personal allowance that is often not being utilized due to her limited pension benefits. Using Company pension contributions to ‘equalise’ the pension pots can provide Corporation Tax relief now and provide an excellent income tax planning tool at retirement.

It is this sort of flexibility that is starting to make pensions much more interesting again. With Dividends becoming less attractive and pressure being put on Salary Sacrifice, perhaps the humble pension is heading back to the top of the pile again.

If you would like to find out more, please do not hesitate to get in touch.

 

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"Thank you very much for an excellent service"

I am very pleased with the service provided by FOCUS in setting up my pension plan.

I was very impressed with the research carried out, advice provided and the very clear information Stuart provided.

Thank you very much for an excellent service!

- Leticia Barcena

"Stuart was really great to work with"

We thought Stuart was really great to work with. He made a very complicated situation in relation to our pensions so much easier for us to understand.

The meetings were so informative and also an unexpected pleasure.

We very much look forward to Stuart looking after the pensions in the future. We feel that we are in good hands and Stuart is a really great guy.

The other members of staff that we came into contact with at Focus were also 5*.

- Steve Chillmaid

"Stuart explained everything in plain English"

Stuart made the process of setting up a private pension seem easy to understand.

The advice he gave was very transparent and spoke in plain English. Thank you

- Lydia Fransham

"The whole process was painless, efficient and very reasonable cost"

I contacted FOCUS to rationalise several pension pots that were sitting dormant.

The explanation of the options and the understanding of my requirements was excellent and we quickly identified the best use of them. The whole process was painless, efficient and very reasonable cost.

Thoroughly recommended.

- Peter Feenan

"Gary Hunt has been our financial adviser for over 20 years and it has been a pleasure doing business! "

Our Company’s pension plans have been in FOCUS’ safe hands for over 20 years. I always feel I get excellent independent advice – which has been proven in our Pension Statements. We are nearing our retirement age and I feel confident that the advice we have been given will stand us in good stead.

The customer service we have received over the years has always been a professional and informative one. The staff turnover is minimal and therefore you really get to know your account manager and vice a versa.

I am really pleased FOCUS have been nominated for the Retirement Adviser of the Year Award as I feel they deserve to be recognised for all the hard work they put into their clients’ needs.

- Jo Davies, Buckle & Davies Construction Ltd - Business & Private Client