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  • Pensions: still a political football? | RetireEasy News
    were seen as an easy target as they were well stocked with funds from a buoyant stock market Now many company funds are finding themselves well short of their future obligations There is now some speculation that the changes brought in since 2009 together with the possible outcome of new Government consultations due to close in September may bring in the same level of savings for the Treasury So will that have the same draining effect on future incomes for tomorrow s retirees To paraphrase a famous quotation there are some known unknowns out there still to be unwrapped and possibly even more unknown unknowns So the all important detail of what we do know Certainly much has flowed from the Budget but in a nutshell on 8 July Osborne confirmed three key items Re confirmation that the Lifetime Allowance LTA will be reduced from 1 25m to 1m effective from 6 April 2016 it will then rise in line with CPI from 6 April 2018 The Annual Allowance AA the maximum that you can put into pension plans before being penalised already reduced to 40 000 p a was further reduced on a tapering basis for those earning 150 000 p a or more If you earn 210 000 or more the AA reduces to 10 000 Green paper consultation was launched to consider the replacement of upfront tax relief on pension contributions going in with a higher level of tax free payments when benefits are paid out As always there is always a further flow of information surrounding the key points after these announcements Critically these are Pension contributions paid by employers will count towards earnings for the purposes of calculating the reduced Annual Allowance This could bring employees earning above 110 000 into a reduced Annual Allowance further clarification from HMRC is awaited Osborne has stated that the new consultation has no pre judgement of the outcome However it is interesting to point out that if all tax relief was removed on all pension contributions and all pension withdrawals were tax free the equivalent tax saving to the Treasury exactly equates to the removal of the current 25 tax free lump sum The Green Paper suggests that to preserve an incentive to make pension savings rather than ISA savings for example the Government may consider a matching contribution rather than giving tax relief There is no clue how this may operate but we foresee many problem areas in such a radical change Responses must be in by 30 September 2015 Quite separately the OTS Office for Tax Simplification has published its terms for its study on aligning income tax and NIC One of its mandates is to look at the removal of employer NIC relief on employer pension contributions This of course will include any salary sacrifice contributions which have been very popular in the Auto Enrolment pension world The main concerns for everyone involved in personal finance is that at the very time when society should

    Original URL path: https://www.retireeasy.co.uk/news/pensions-still-a-political-football (2016-04-27)
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  • The new pensions freedom: “sit on your hands” remains the best advice | RetireEasy News
    thinking around freeing up of the pensions market and removal of the annuity strait jacket also has his stamp on it It s easily arguable that he is the only person in Parliament who fully grasps how pensions work and it s certainly a Liberal policy in the old sense of the word allowing people to self determine their future Political timing The timing however appears largely political a much needed fillip to the economy just before a General Election as well as a chance for the Coalition parties to demonstrate their commitment to personal liberty over the nanny State The downside however is that the financial markets are patently not ready for the changes you would assume quite reasonably that when a game changer like this is introduced the very people who will have to make it happen might have been consulted before the policy and timing were announced not as surprised as the rest of us Pension Wise has hastily been developed to head off enquiries at the pass they will only warn and signpost not provide advice and will 300 people seeking to advice hundreds of thousands be in any better position than the 300 of Sparta While those who can afford to take Steve Webb s sound advice to wait before making a decision will probably do so my real worry is that financial expediency will drive many to make decisions they could regret longer term There are lest we forget huge numbers in their mid 50s onwards carrying large amounts of debt the squeezed middle aged who might own their home but who have remortgaged possibly more than once and have been helping to fund their children through higher education Some telling figures released by the Equity Release Council on 26 March showed that 31 of older homeowners currently experience financial stress despite having 241 000 of property wealth Some 24 have remortgaged for extra funds Will the Pension Wise 300 cope Over the next few months many may make the decision not unreasonably that they d be better off using their pot to bring down expensive card debt and loans The likelihood is that they will be passed backwards and forwards from Pension Wise and their provider and both will issue warnings of the implications of cashing in The provider may even be persuaded to cash in the pension plan Or not many have signaled they are not ready or able to do so Equally they may make some eye watering charges for allowing the person to draw down a tranche Some pension holders keen to get their hands on the money will look transfer the fund to another provider who will allow a cash in quite possibly paying a handsome premium in return More worrying they may fall victim to a scam and end up paying prohibitive rates of tax their pension details having been sold on to a fraudster With an IFA behind them offering sound advice they may resist the temptations

    Original URL path: https://www.retireeasy.co.uk/news/the-new-pensions-freedoms-sit-on-your-hands-remains-the-best-advice (2016-04-27)
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  • Good news for retirees as maximum drawdown income increases | RetireEasy News
    RetireEasy Team Contact Accolades Blog Press Releases News Articles Alerts Updates Helpful Guides Good news for retirees as maximum drawdown income increases 17th January 2013 by RetireEasy RetireEasy is pleased to report that draft legislation has today been published to increase maximum drawdown income from 100 of GAD to 120 GAD This will commence for income reviews falling due on or after 25 March 2013 Richard Collinson says this will be a welcome relief to many retirees who have been hamstrung by falling gilt yields directly caused by the Government s QE measures this easement is well overdue Next post RetireEasy 2016 Terms Conditions Privacy Policy SaaS Solutions from Cyber Duck Follow us LinkedIn Facebook Twitter More information Navigation About us What is RetireEasy How it works Accolades FAQs Security News Press Contact Privacy Policy Terms Conditions Info Retirement Planning Retirement Plans Pension Calculator Pension Plans Retirement Income Retirement Annuity Planning for Retirement Planning Retirement Plan for Retirement Retirement Planner Not yet retired You can now include all your additional savings investments and Pension Contributions between now and your retirement taking into account increasing these Additional Contributions year on year and stipulating whether these are one off or recurring contributions

    Original URL path: https://www.retireeasy.co.uk/news/good-news-for-retirees-as-maximum-drawdown-income-increases (2016-04-27)
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  • Drawdown Regulations Must Now Be Relaxed | RetireEasy News
    RetireEasy We learnt last week that the Pensions Regulator is relaxing the accounting rules for Company Pension Schemes to help them through the economic downturn The Regulator blamed much of the crisis on low gilt yields which have been directly depressed as a result of the Government s quantitative easing QE programme The Pension Regulator said Low gilt yields have the effect of driving up current measures of pension scheme liabilities and as a result will typically worsen scheme funding levels However this major u turn does not help the many thousands of individual retirees who receive their retirement income from Drawdown Plans In April 2011 when the gilt yield was 4 00 the Government decided to cut the amount an individual could withdraw from a Drawdown Plan from 120 of GAD to 100 of GAD Since then the Government has embarked on another round of QE and the gilt yield has almost halved to 2 25 Surely now that the Pension Regulator has taken decisive action to help company pension schemes HMRC must also act and provide relief to individual retirees by restoring the 120 of GAD rule After all HMRC will directly benefit with increased income tax revenue from the retired population something they are quite keen on it seems For all advisers and professional connections please visit www retireeasypro co uk Next post RetireEasy 2016 Terms Conditions Privacy Policy SaaS Solutions from Cyber Duck Follow us LinkedIn Facebook Twitter More information Navigation About us What is RetireEasy How it works Accolades FAQs Security News Press Contact Privacy Policy Terms Conditions Info Retirement Planning Retirement Plans Pension Calculator Pension Plans Retirement Income Retirement Annuity Planning for Retirement Planning Retirement Plan for Retirement Retirement Planner Not yet retired You can now include all your additional savings investments and Pension

    Original URL path: https://www.retireeasy.co.uk/news/drawdown-regulations-must-now-be-relaxed (2016-04-27)
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  • Pensions Freedom: welcome to the wonderful world of Kafka… | RetireEasy News
    when the new pensions freedoms were announced last year They appeared like a magical rabbit out of the Chancellor s hat and with good reason in the words of a well known professional magician You ll like this not a lot Prior to the announcement there had been almost no consultation between Government and the pension providers and I understand that there was also very little discussion between Government and the Financial Conduct Authority FCA They had been operating within a well trodden and well understood world where the vast majority of all UK pension plans are designed to provide retirement benefits on a fixed pension date that constitutes a 25 lump sum potentially higher from a company pension scheme and a fixed monthly pension or annuity Changing from one system to another like this is like turning a tanker round And they have had only a year between the announcement and the reforms going live I ve heard of some financial institutions where client records are still in hard copy only so don t assume that a new bit of coding on the mainframe will provide an instant answer This system quite simply put is not compatible with the new pension freedoms allowing 100 cash withdrawal Faced with a request to take the cash and run for whatever purposes worthy or otherwise the computer will inevitably say no And why should the providers be more co operative Pensions Freedom does not in fact constitute a Statutory obligation on the provider to allow more than 25 of the fund to be taken in cash Despite what the customer wants and has been told he can have by the Chancellor the provider is under no obligation to provide it And yes you would have assumed that the Government would have thought this through before pushing through the changes So is there no way to get your money out Well not all providers are saying no But the ones that say yes do add strings Over recent weeks and months an increasing number of pension providers have begun to insist that its customers must not only seek guidance from Pensions Wise which will warn them of the potential downsides of taking out their cash but also prove they have sought advice from an IFA before the provider will allow the pension to be cashed in And proving means written confirmation But in order for an IFA s advice to be compliant he she must present the most suitable outcome for the client and there will be many alternatives for the IFA to consider other than the 100 withdrawal of the pension fund That can take a lot of time to compile believe me hence the 1000 estimate And doing a quick and dirty job on it is not an option In March this year the FCA announced that in March 2016 it will commence a review of the pension freedom advice dispensed by IFAs As a result of this impending review you

    Original URL path: https://www.retireeasy.co.uk/news/pensions-freedoms-welcome-to-the-wonderful-world-of-kafka (2016-04-27)
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  • Mark’s top six tips on Pensions Freedom – numbers one to three | RetireEasy News
    be paying tax or have paid too much tax on your drawdown you can wait until the end of the tax year for HMRC to reconcile your tax or you can reclaim it now There are three different claim forms depending on your exact circumstances P50Z P53Z 0or P55 and for more info go to https www gov uk claim tax refund you get a pension Top Tip 2 Don t forget about pension provider rules and watch the costs The concept of pensions freedom was the brainchild of the previous coalition government particularly Steve Webb with virtually no consultation whatsoever with the pension providers So launching it in the timeframe of just one year from announcement caught everyone in cricketing terms on the back foot Not least the pension providers themselves an industry used to making changes carefully and slowly In a nutshell most of the pension providers systems cannot yet cope with releasing ad hoc payments from your pension funds Indeed they can actually refuse to hand over your funds pension freedoms is not a statutory right If you are faced with a refusal and are keen to make use of your money on which more later you will need to seek a new pension provider and new pension plan to facilitate your payment This however may come at a cost which may be considerable and it may also be difficult to obtain affordable advice And the advice you get may well not be what you want to hear anyway And you will find many advisers not even prepared to offer advice if that doesn t sound like a contradiction in terms In essence the Regulator is at odds with Government and takes the view that in most cases encashment of a pension fund is unlikely to represent suitable advice Indeed advisers are under considerable scrutiny from the regulator on how they deal with and advise on customer requests to drawdown so you may find many advisers reluctant to advise in this area In such instances you will need to approach your pension provider direct but here lies the problem they may refuse to deal with you until you have sought advice putting you in a Kafka like circle Top Tip 3 Don t dismiss annuities and rush into drawdown The chances are that when you started your pension plan you intended to keep it running until you stopped work with plans to take some or all of the tax free lump sum available and buy an annuity plan with the rest That after all was the way the vast majority of retirees funded their retirement Of course annuities haven t looked like such a lucrative option for some time now because annuity rates i e the amount of pension you receive in return for your pension fund have fallen significantly over the last decade This has been one of the reasons that the concept of pensions freedom has been welcomed in many quarters Certainly since the announcement

    Original URL path: https://www.retireeasy.co.uk/news/marks-top-six-tips-on-pensions-freedoms-numbers-one-to-three (2016-04-27)
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  • Mark’s top tips for pensions freedom – numbers four to six | RetireEasy News
    the remaining pension fund to buy an annuity plan This was because no tax free cash was available once an annuity had been purchased so the cash was taken whether it was needed or not A huge amount of this unused cash was re invested into Cash and Investment ISAs and this became a fairly standard route for retirees over the last 10 years Very recent evidence suggests that individuals are still taking the maximum cash sum even though it is not needed and this again is being reinvested immediately into cash and investment ISAs This may be due to the perception of quicker access to cash under an ISA or a lack of trust in the pension plan provider or possibly both One of the key tenets of the new pension freedoms was the removal of the 55 death tax on the remaining crystallised pension fund after the 25 tax free lump sum had been withdrawn Overnight this made the death benefits available from pension funds not only more valuable but also very efficient for Inheritance Tax planning purposes And don t forget you can withdraw the 25 tax free part of your pension fund in stages either in ad hoc amounts as and when you need some cash or as regular tax free income ISA funds are potentially subject to Inheritance Tax as they cannot be written under Trust and their tax status changes on the death of the investor So if you wish or need to plan for the potential IHT that your family may need to pay on your death even after the Chancellor has kindly moved the goalposts for you in the last Budget consider your pension fund as a possible vehicle to mitigate this liability You should certainly seek independent legal or financial advice when considering such complex planning especially as potentially large sums are involved and considerable long term planning may well be required Top Tip 6 Is using drawdown to purchase a Buy To Let property a good idea BTLs have been extremely popular over the last 20 years not least due to the potential dual gain of a regular fixed income and an increase in the capital value of the property In reality of course it doesn t always work out like this and as we all know property prices and rental income can fall as well as rise and there is always the tenants and lack of rental to consider a month or two void can really eat into your returns However BTLs can be very tax effective for higher rate tax payers particularly when a mortgage is in place on the property However in the emergency Budget George Osborne announced a restriction in the amount of tax relief available from April 2017 new rules will be introduced gradually that will ultimately cap the tax relief on the mortgage interest to 20 So does that still make it a worthwhile haven for your funds Property prices have risen particularly in

    Original URL path: https://www.retireeasy.co.uk/news/marks-top-tips-for-pensions-freedom-numbers-four-to-six (2016-04-27)
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  • Do you have a pension entitlement you’ve forgotten about? | RetireEasy News
    average we down over 32 000 cups of tea and coffee in that time but that s another story The received wisdom is that this figure is likely to rise in years to come as we all work for longer and changes in technology make the roles we re currently in redundant How many typing pool operatives do you see these days for instance the beating heart of every large organisation when I began work Whether or not you are Mr or Mrs Average you may well have spent a few years along the way working for someone and perhaps didn t realise that your pay was being docked and saved into a company pension If so you could be owed a useful sum now and longer term And no don t despair if the company you worked for no longer exists It may well have been taken over and the pension transferred or protected Even if it went into liquidation some rights may still remain So how do you set about finding out if you are owed a pension The Government runs a very helpful and surprisingly quick department within DWP called the Pension Tracing Service Get in contact by email telephone or snail mail give them as much information as you can including whether you re looking for a workplace pension or personal pension and they will let you know you to contact It s an entirely free service and as they say nothing ventured even if it was six months spent stacking shelves between University and your first job you may still have an entitlement Go to https www gov uk find lost pension Next post RetireEasy 2016 Terms Conditions Privacy Policy SaaS Solutions from Cyber Duck Follow us LinkedIn Facebook Twitter More information Navigation About us

    Original URL path: https://www.retireeasy.co.uk/news/do-you-have-a-pension-entitlement-youve-forgotten-about (2016-04-27)
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