Many of our private clients come to us via our corporate work, others via personal recommendation. We are always hesitant to talk about "typical" clients, but many do share similar characteristics. Usually a mix of pensions; DB or final salary if they are very lucky, a mix of defined contribution, both workplace and private, State Pension at 66 or 67 for the slightly younger. Often with ISAs, savings, maybe share plans - again if they are lucky. What they often want is to know when they can retire without running out of cash, what to do with old pensions, and help if they are able to contribute more prior to ceasing full-time work (if you worry about how to spend time in retirement, look at our financial education section).

As a result of wealth accumulated over a lifetime of work, there may be potential Inheritance Tax issues. This can often be mitigated with careful planning - the earlier the better.

Whatever your circumstances, the first stage is for us to have a chat, find out what you would like to achieve and to see if we can help you.

Please remember that investments can go up and down in value, so you could get back less than you put in. Also a pension is a long term investment and not normally accessible until age 55 (57 from April 2028)

In December 2012 the chancellor announced that from the start of the 2014-15 tax year:

• Annual allowance reduces from £50,000 to £40,000
• Lifetime allowance reduces from £1,500,000 to £1,250,000

The 2015 budget further reduced this figure to £1,000,000 from the start of the April 2016 tax year. This has now increased with CPI and will be £1,073,000 for 20/21 tax year. This figure has been frozen until April 2026.

Reductions in the annual allowance from £40,000 to as low as £10,000 for those earning over and beyond £150,000 p.a. have now been pared back.

Following much lobbying, the 2020 budget has made this far less restrictive for the majority of people by confirming that those earning £200,000 or less will no longer be affected in any way, and only those with "adjusted net income" of more than £240,000 will see their annual allowance taper down. The minimum annual allowance though is now £4,000 which will affect anyone with total income over £300,000.

What's the impact?

Although the situation regarding annual allowance has improved, anyone with substantial pension savings, or with the ability to make large contributions should seek advice.

• Highly-paid senior executives and employees in money purchase schemes, especially those with previous pension savings.
• Entrepreneurs, directors of small companies and the self-employed (who are less likely to have a regular pattern of pension savings) could arguably more severely affected.
• Wealthier individuals may be persuaded to stop pension saving on the basis that tax reliefs would be clawed back later if their benefits exceed the reduced lifetime allowance.
• Others who are not expecting to draw benefits in the short term could continue with their contributions, securing tax relief at the highest rate and accepting the risk that it could be clawed back in the future. The long-term outcome in tax relief terms should be no worse than neutral and better on occasion.

How we can help you?

We have extensive experience in this area and have helped many corporate clients devise support systems for employees likely to be affected by these changes.

For those in defined benefit schemes, their situation requires careful thought and a deep understanding of both the pension scheme and the tax rules.

Please contact us now on 01527 306321 to arrange a no-obligation meeting to see how we can guide you and your staff through these changes.

As the pensions freedoms become more widely known, we are seeing more and more evidence of people needing help and guidance with the pensions that they have built up.

Designed to complement the state-backed Pensionwise service, or supplement it for those that are eligible, our Pension review service aims to help you understand exactly what pensions you have, key areas to be aware of and the options open to you.

It will also identify potential actions that you need to take, from ensuring your contact details are up to date through to understanding your investments and death benefits. The review includes final salary schemes, which in our experience are often misunderstood, especially by those with fairly short periods of service.

If you would like a review of your pensions please download the spreadsheet and contact us for a quote.