Types of Pensions
Pensions can seem confusing and with good reason. There are many different types, with their own sets of rules and functionality. Below we explain a few of the key pension products.
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Stakeholder pensions were introduced to help simplify pension planning and cap costs for clients. The entire retirement landscape can be very confusing though, with so many solutions available, especially if you’ve had a long and varied career. By listening to your plans and analysing the pensions you’ve built up, Pure Wealth Management can pinpoint areas to make the most of your stakeholder pension. We will always consider this solution in retirement planning, to help reduce costs for you.
Personal Pensions have evolved significantly over the years. Costs have trended downwards, bringing these solutions back into the market after initially often being outpriced by Stakeholder solutions. There are many variations of a personal pension though. With the most recent solutions generally offering lower costs, greater investment choice and broader functionality. We will help ensure that your personal pension is providing for your personal circumstances and requirements. After investing money and more importantly time in building up a personal pension, we want you to make the most of it. If you’re looking to start, consolidate or take income from your personal pension, our financial advice can ensure you get value out of it.
Self-invested Personal Pensions (SIPP)
By having a cross-section of competing providers and the entire market at our fingertips, we can see if your self-invested personal pensions (SIPPs) are suitable for you. SIPPs offer far greater investment flexibility than stakeholder pensions or most personal pensions. However, they can be very complex and with complexity comes the associated risks of unusual charging structures, as such they may be difficult to calculate total costs. In addition, higher-risk investments are permissible, which should only be considered for sophisticated investors. We frequently find clients holding existing SIPP contracts yet they often do not know why, nor do they require them. Pure Wealth Management will analyse your existing holdings in line with your requirements and ensure you’re not paying for functionality that you do not require.
Final Salary Pensions
Final Salary Pensions, also known as Defined Benefit Pension Schemes are Occupational Pension Schemes provided by some Employers. They offer retirees a guaranteed level of pension income at retirement, the value of which depends upon the Employees length of service, their earnings and usually links with inflation. These were once considered gold plated pensions and were commonly provided as an employee benefit. Due to the expense of providing these schemes and the uncertainty around Employers liability, they are now largely only available within the public sector.
This is considered to be one of the most complicated and high-risk products to advise on within financial services. As such, there is an additional advanced qualification and Financial Conduct Authority (FCA) permissions required for Financial Advisors to specialise in this area. Both the advising Directors within Pure Wealth Management hold this qualification and are Pension Transfer Specialists.
Safeguarded Benefits - Guaranteed Annuity Rates
Safeguarded benefits are guarantees built into some existing pensions that we review. These tend to be older style pensions, but the guarantees are often irreplaceable in today’s market. As such they should be valued in high regard. These may be in the form of a guaranteed early retirement age, Guaranteed Minimum Pension (GMP) or Guaranteed Annuity Rates (GARs). All of which will provide a pre-defined guaranteed income for life. Sometimes the income available compared to the capital sum invested can be many multiples in value over that available in today’s market. The paperwork can be complicated though and it isn’t always clear whether a client holds these benefits or what restrictions they impose. That is until we have liaised with the pension provider and asked the right questions to establish the facts. When these benefits total over £30,000, financial advice must be taken in order to facilitate a pension transfer.
These Pension services are one area of what Pure Wealth Management offers. Whatever service we provide, it is underpinned by a desire to help people with their finances and provide solutions from the open market to suit their personal needs.
Financial advice, especially from an impartial source such as Pure Wealth Management, is the best way to take account of your finances and create a bespoke, achievable plan of action to grow your wealth organically.
Financial advice is the first step to reaching your financial objectives, we’re here to make things clear for you and establish realistic achievable goals. This means that you can have peace of mind that you are employing expert advice for the things that matter most to you, so that you can spend your time doing the things you enjoy.
Pensions are a long term investment. You may get back less than you put in. Pensions can be and are subject to tax and regulatory change; therefore the tax treatment of pension benefits can and may change in the future
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Estate Planning & Will Writing
Making arrangements in the event of your death can be daunting, our expert advisors aim to build a personal relationship with you, so it needn’t be a difficult task. We make sure to understand you and your wishes, so that we can tailor your planning to cater for exactly what you intended.