Do you know how much you need to be comfortable, and live the life you dream about, in retirement? If you don’t, you’re not alone. The good news is, it’s never too late to start planning.
The concept of retirement these days is an entirely different prospect than it was even 20 years ago. Many of us work well past the traditional retirement age, opting for part-time work, or being self-employed, rather than opting for a complete stop. We’re living much longer and, importantly, remaining active. Ensuring you have enough to not only keep you doing the things you want, but making it last long enough, is absolutely vital.
Whether retirement is 20 years away, or coming up in a couple of years, we can help you build a plan that works for you. We’ll explore how to maximise the value of your pension pot and your tax obligations.
With flexible living, comes flexible planning, and assessing which path to take can be overwhelming. Our expert planners will help you review every aspect of your retirement plan – even helping your employees get the best advice about their own retirement.
How we manage our money today, will determine how well we live in our later life. Your pension plan should be as unique as you. Whether you need to review your existing plans and investments or you’re just getting started with retirement planning, we can help.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you initially invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
Maximising your pension fund
The pension landscape is constantly changing, which makes keeping your plan and investments up to date vitally important – and complex. Pensions are still a very efficient way to save for the future, allowing you to make contributions to your retirement pot of up to £60,000 tax free as of 6 April 2023. Tax relief is based on your marginal rate of income tax on contributions of £60,000 per tax year, or 100% of earnings, whichever is lower.
The Tapered Annual Allowance
Tapering is a minefield, and it can be very complex to account for. In short, when your income exceeds £260,000, your tax-free allowance decreases proportionately to your income. That is, if your adjusted annual income is more than £260,000. Tapering reduces your annual allowance by £1 for each £2 that this is exceeded, to a minimum of £4,000.
Carry Forward Unused Contributions
Do you know if you qualify to bring-forward any unclaimed contributions? If you’ve contributed less than the Annual Allowance in the previous three tax years, and you were a member of a UK registered pension scheme during that time, you might be eligible to bring it forward.
That is, you might be able to contribute more than the current tax year's Annual Allowance of £60,000, or your tapered annual allowance, if applicable.
Your Lifetime Allowance
As allowances fluctuate from year to year, it’s become a necessity to keep an eye on your Lifetime Allowance (LTA). When it comes to your LTA it really is a case of use it or lose it.
The LTA is the maximum amount of tax relievable pension savings an individual can benefit from over the course of their lifetime. You can contribute over these limits, but that money will be subject to a tax charge on the amount above the allowance.
We will help you maximise your contributions, so you keep pace with your LTA.
The value of an investment with us will be directly linked to the performance of funds you select, and the value can therefore go down as well as up. You may get back less than you initially invested.
The levels and bases of taxation and relief from taxation can change at any time. The value of any tax reliefs depends on individual circumstances.
Planning your retirement
Helping you plan for your retirement is a large part of our business. It’s one of the most important services we provide. We will work tirelessly towards making everything as it should be when you retire.
You might be thinking about retiring in the not-too-distant future, or maybe it’s decades away, either way it’s never too early (or late) to start planning. We will work with you to work towards what you dream of achieving in retirement can actually becoming a reality.
We work with a number of carefully selected plan providers who’ll be on hand to ensure everything is moving smoothly in the right direction.
We offer the following pension plan types:
The value of an investment with St. James's Place will be directly linked to the performance of funds you select, and the value can therefore go down as well as up. You may get back less than you initially invested.
Nearing retirement
With retirement on the horizon, it’s time to make decisions about how you’ll draw down your pension income and what you want done with it after you pass away. These are some of the most difficult (stressful) decisions you’ll ever make. So much is at stake, making a wrong move could have serious implications for your retirement years. We’ll help you find the right path for you and get you ready to head into retirement.
Annuities
You can use your pension fund to purchase an annuity* and this can provide you with a secure income for life - no matter how long you live.
Flexi-access Drawdown
Flexi-access Drawdown means taking an income directly from your retirement fund. It’s not as straightforward as it sounds. If you’re thinking about this option, you’ll definitely need specialist advice.**
Defined Contribution (DC) Pensions
In 2015 the Pension Freedom Reform Act came into being. This allows you to access a Defined Contribution (DC) pension from the age of 55 (this will change to 57 from April 2028). With a DC pension your pension income is unrestricted, provided you pay your marginal rate of Income Tax on any taxable withdrawals. You can take up to 25% of your pension fund as tax-free cash.
DC pensions can be passed to anyone after you die, not just a dependant.
If you die before the age of 75, income taken from a DC pension by beneficiaries is tax-free. If you die after 75, income is at the beneficiary’s marginal rate. It’s important to ensure that you have accounted for this in your estate plan. To learn more about estate planning click here.
The value of an investment with St. James's Place will be directly linked to the performance of funds you select, and the value can therefore go down as well as up. You may get back less than you initially invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
*As annuity rates can change substantially and rapidly, there is no guarantee that when you do purchase an annuity the rates will be favourable. This could mean that your pension thereafter may be less than you hoped for.
**The level of income from pension drawdown is not guaranteed. There is a very real chance that you may need to reduce your drawdown income in the future, in particular if the performance of your investments is lower than expected, or you live to a greater age than originally anticipated when choosing your initial income level.
The rules governing how much income you can take directly from your pension fund may change. This could mean that the income you can take from the investment no longer meets your requirements.
Self-Invested Pension Plans
Self-Invested Pension Plans (SIPPs) are, as the name suggests, a plan that allows you to make investment decisions related to your pension plan. It allows you to invest in a more diverse range of opportunities than traditional plans.
You control the mix of investments, which while flexible, can potentially be a very complicated way of managing your savings. Unless you have expert knowledge of investments, you should not undertake to manage your fund without the support of an accredited financial adviser.
A SIPP allows you to invest in a range of assets and asset classes, including equities, Unit Trusts, gilts and commercial property. This flexibility means you can spread your risk if your investments experience periods of volatility. With flexibility comes the need to pay constant attention to your fund, to maximise the performance of your investments. Only people with the right level of expertise and experience should entertain having a SIPP.
SIPPs will not be suitable for everybody and generally only those who are fairly experienced at actively managing their investment should consider this type of investment. The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances. The value of a SIPP can fall as well as rise. You may get back less than the amount invested.
Workplace Pensions
Whatever stage you’re at with your career, if you are employed you are likely to be contributing to a pension. Figuring out what you want to have in place for retirement is daunting, but planning today will make tomorrow better. Without proper planning there’s a risk your savings won’t last as long as you.
We’re living longer and staying active well into our later life. For many people this means they will be retired for as long as they were in work.
We have lots of different types of plans to help you prepare for retirement. And we can help you review any existing workplace pension funds you have acquired.
As you age, your needs will change as will your earnings; flexibility is key. We will help you build a plan that will carry you through the years and provide the income you need to live a long, happy life.
The value of a pension will be directly related to performance of the funds selected and can fall as well as rise. You may get back less than the amount initially invested.
Employer Pension Plans
It’s compulsory to provide a pension plan for your employees, and it may feel as if you’re no longer in control of this important employee benefit. Auto Enrolment has affected all employers, regardless of their business size. As a director or business owner, you’re obligated to understand, implement, and comply with every aspect of HMRC regulations. We’ve got you covered.
We work with employers to make sure you understand what it takes to remain compliant, and how to develop a pension plan that is a real incentive for employees. We’ll also ensure you keep ahead of regulatory changes. The fines for non-compliance are high, but with our support you won’t find yourself on the wrong side of HMRC.
We work closely with employers to ensure you understand:
Through St. James's Place, we have relationships with carefully selected pension providers, so we can advise you on a broad range of pension products. With our help you remain compliant and support a pension plan that works well for you and your employees.
The value of a pension will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you initially invested.
Self-employed Pension Plans
As a self-employed person you can’t join a work-place pension scheme, but you can create your own plan. Of course, if you’ve made enough National Insurance contributions, you will receive your state pension. But it’s unlikely this alone will be enough to fund you in you later years.
Creating your own retirement plan will allow you to save for the future and maximise your retirement earnings.
We will create a tailored plan that will deliver flexibility and stability (when and where you need it). Being self-employed comes with a lot of additional pressure, but developing a solid retirement plan will keep you moving forward so, when the time comes, you can jump into retirement and live the life you dream about.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you initially invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is dependent on individual circumstances.
Retirement Plan Trustees
A Trustee can be a person or a company who ‘holds’ the assets of the pension scheme for its beneficiaries. Work-place pension schemes will usually have Trustees. Their role is to ensure that members’ scheme benefits are protected. Trustees play an important role in the running of a scheme. Using a Trustee is complicated, time-consuming and often an expensive process.
Being a Trustee can be overwhelming, so it’s vital that you have a trusted adviser to turn to. We have spent many years working with Trustees and we offer a range of professional trustee products and services. From offering access to actuarial and administrative services to compliance and investment management.
The Partner Practice is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.
JPS Wealth Management Ltd is registered in England and Wales, Number 09274545. Registered Office: 14a Montpelier Place, Brighton, BN1 3BF.
