Retirement Planning

The first step into the world of employment provides a source of income. How we decide to use that income is a personal decision but when we stop working, we will require some ongoing income. With the confirmed increase in longevity, we are all living longer and require income to match our needs.

A part of our income in retirement is provided through government pension schemes. However these have limited benefit and will become an increasing burden upon the state. Therefore, an individual who makes a £100 monthly contribution would have the payment enhanced by £25 giving an actual investment of £125. Higher rate tax payers are entitled to reclaim the higher rate allowance with a further tax adjustment of £25 making the overall net cost £75 producing a highly tax efficient investment.

Everybody needs to be give serious thought to the opportunity to have an additional income in retirement. Alternative investment routes are available to everybody and it can be appropriate to consider the use of pension planning alongside either regular saving routes that include funding through ISAs and other investment vehicles.

If you are an employee with a company pension scheme, this will provide a source of future benefits. Invariably the company will be making a contribution to such a scheme and it is usually allowable to make additional contributions into such a plan.

The long term view by some people that they will consider taking some action in the future is often misplaced as time passes us by all too quickly. The long term need is for all of us to consider retirement planning and to action a review of your current circumstances and expectations. Retirement Planning needs regularly reviewing and consideration of how we are all going to ensure that our income in retirement will maintain the standard of living that we consider acceptable.

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