Pensions

In its most basic form, a pension is a tax-efficient way to save for retirement. When the time comes to stop working, the last thing you want is to stress over your finances. Planning for retirement over time can help ensure a more comfortable future by providing you with a steady income.

Is the Basic State Pension Enough for You?

As the name implies, the Basic State Pension alone is unlikely to provide sufficient income for a comfortable retirement. For the tax year 2014/2015, the maximum weekly amount is £113.10 (or £180.90 for married couples).

However, you might qualify for more through the State Second Pension, which supplements the Basic State Pension. This depends on factors such as your earnings (if you earn above £5,772), whether you are caring for a sick or disabled person, or if you receive certain benefits due to illness or disability. You could also be eligible for Pension Credit if your income is low.

Additional Pension Savings

Various schemes allow you to plan for your retirement with more certainty:

Pre-retirement: You can assess the potential value of your pension pot and determine the minimum income you’ll have in retirement. You also have the option to target a specific income or minimum level of income for your future, ensuring it’s secured now. This approach works well alongside cash flow modelling.
At retirement: You can secure a reliable income for life while maintaining flexibility. This allows you to adjust your income whenever needed, providing you with the freedom to adapt to any changes in your circumstances.

Additionally, you have access to invest in a volatility-controlled portfolio, which aims to preserve your fund’s value over time. This approach helps protect you from the risks associated with market volatility, ensuring growth while offering peace of mind and access to your funds when needed.