At some point you will need to rely on the wealth that you have created in your lifetime to provide an income in retirement. There are no hard and fast rules, but pension accounts do represent one of the most tax efficient methods of saving for retirement.
We are all responsible for ensuring that we have enough in retirement. Not everyone has the benefit of an employer sponsored pension scheme, which makes it even more important to ensure that we save enough for ourselves.
Pensions can be a useful tool to plan for something prior to retirement as well. New legislation allows you to draw your tax-free lump at age 55 whilst delaying the income (leaving the remaining fund intact and invested) until you need it.
Broadly speaking, the traditional use of Insurance Company "packaged" products has not served individuals very well. The lack of transparency and the emergence of hidden penalty clauses have often led to our clients being unable to predict or control their financial plans. Insurance companies have often sought to treat clients as a collective group, rather than as individuals, imposing financial penalties to protect their own interests, regardless of their affect on clients
Individuals, in many cases, should consider a new home for their pension savings where they can access a much wider choice of investments or a more professional approach to managing the money within the pension. The emergence of low cost SIPP accounts makes it possible to access up to 2000 different investments. Typically the cost in terms of charges is higher, but the like for like performance when compared to an insurance company plan has historically been much higher, more than making up for the additional costs.
The factsheets shown on the left hand side provide further information on the type of pensions available and details on drawing your benefits.
If you want to know what you are likely to receive from the state by way of the basic state pension and the various top up pensions which have been operated in the past, you will need to complete and forward form BR19. Use this link to download one from the Department of Work and Pensions.
http://www.thepensionservice.gov.uk/resourcecentre/br19/home.asp
