Planning Your Retirement? Useful Information and FAQsIf there’s one thing everyone looks forward to during his or her later working life, it’s having enough money to retire. Maybe you’re planning to travel the world? Perhaps you’ve set your sights on racing rally cars or settling down by the seaside?
Whatever your plans, its important to get a clear idea on the retirement process before jumping into things head first. You may think that retirement is as easy as waking up one morning to find your bank account balance bolstered by your latest pension payment – if only it was that simple!
Retirement can be a bit of a grey area, the guidelines aren’t always clear. To help, we’ve compiled a guide with everything you need to know about the next big step. We’ve also included those all-important answers to the questions that regularly crop up around the subject, everything from “how will new workplace pension laws affect me?” to “when will I receive a state pension?
Nowadays you can go on working for as long as you please, whilst still claiming a state pension. When you receive this will depend on your qualifying state pension age…
State Pension Age
All employees will automatically enrol onto the scheme, providing you’re over 22, under the state pension age and earning a minimum of £10,000 a year. If you already have an arrangement in place and do not think you’ll benefit from the workplace pension, you can opt out at any time.
This is where things get a little complicated. It’s worth speaking to an independent financial adviser if you’ve little to no experience in investing.
I won’t be needing the workplace pension
How can I access my pension?New legislation was introduced in April 2015 to allow those with a contributed pension to take a lump sum or small amounts at the age of 55. It’s worth noting that 25% of the money you withdraw will be tax-free; the rest will be subject to tax. Think of it as an income tax.
As with most retirement related queries, it may be worth seeking advice from an IFA, who will be able to help you reclaim your funds.
This is especially true if you’ve had several jobs and have paid into several pension pots over the years.
What can I spend my pension on?Whatever you like! Many choose to use their fund to travel, living costs, paying off their mortgage or to fulfil lifelong dreams.