Help & FAQs

As much as you can!

Actually, it’s not that simple and we realise that paying into a pension is one thing to balance along with all of life’s other priorities. What is clear though, is that saving early from a younger age can significantly increase the amount of money you’ll have in retirement.

It’s important to know what you can afford, and if you are employed then you should be benefitting from a workplace pension, but it’s also about having the right mindset when it comes to long-term saving, particularly pensions where you can’t just take the money out when you like. Remember – it’s saving your income, for your future self to have a comfortable retirement.

If you want to start taking a closer look, head over to our pension calculator and have a play around with some numbers or get in touch with us and we’ll be happy to help.

Yes and no! You can technically pay in what you like, however the real attraction with pensions is the generous tax relief you receive on the contributions you make. It’s here where there is a limit to the amount you can pay in whilst still attracting this benefit, and many providers will cap your payments in at this level to avoid any issues with HMRC and adding too much tax relief.

The pension Annual Allowance (AA) is the rule which effectively caps your contribution at £40,000 per year, subject to having sufficient income to do this of course.

You can even pay into a pension, and get tax relief, even if you have no relevant earnings.

However, it’s a bit more complicated than that and whilst there are many ways to maximise the benefits of paying into a pension there are also a few ways to get this wrong and end up paying excess tax relief back.

To make the most of what you can do, please get in touch with our retirement experts.

Pension tax relief is effectively a government top up on your pension contributions to encourage and incentivise people to save for the long term.

It works by effectively giving you back the tax you paid (but into your pension) on the earned income that you are now using to pay into your pension. This provides some excellent opportunities for almost everyone, no matter what your earnings are.

An example for someone who is a basic rate taxpayer, paying £80 into their pension, will receive a further top up contribution of £20 from the government on this payment, and so on.

People paying tax at higher rates can claim further relief via their tax return, and even those without earnings can still benefit from some tax relief. A great opportunity to plan for your retirement whether you are employed or self-employed.

If you want to see the real power of tax relief, try out our tax relief calculator where you can see what this could mean for you.

A good question and one we get asked about a lot. It’s always better to understand what you have when it comes to pensions, which in turn will hopefully increase your confidence about what your retirement plans might look like.

There are some key benefits to reviewing your pensions, particularly if you’ve gathered a few up during your career. Simplification, clarity, correct fund and investment choices are just some of the positives to reviewing your plans, but this also needs to be done carefully and ideally with professional advice to make sure that mistakes are avoided.

Some pensions have valuable guarantees and benefits that can’t be replicated easily and any review, and potential consolidation, does not guarantee improvements.

To learn more about moving your pensions into one plan please watch our pension consolidation video or get in touch with our team who are here to help.

The pension lifetime allowance or LTA as it’s often shortened, is the overall limit of the amount you can accrue in your pensions over your lifetime, before you start to incur additional tax charges.

In the tax year 2020-2021 this was set at just over £1M before additional taxes kick in. As with most things pension related, this has gone through a lot of change over the years and there are several layers to it which can become complex.

If you think this may become a (nice) problem for you, then please get in touch with us for tailored pension planning advice.

This mainly affects those with very high earnings, and for the 2020-2021 tax year anyone with an income over £240,000 per year is likely to have their pension annual allowance restricted in some way.

This is a complex area and we’d suggest that you seek professional financial and/or tax advice to ensure your individual circumstances are considered.

This is a very individual thing and what you need is likely to be different to others. We’ve taken some thoughts and ideas from a recent study conducted by Loughborough University which summarised this into three distinct levels of retirement spending – Minimum, Moderate and Comfortable.

At the minimum levels of spending, the report suggests a single person would spend £10,200 per year, and a couple would spend £15,700 per year. This kind of lifestyle covers all the basic needs with a little left over for more fun things such as eating out once a month. As you move to moderate and comfortable levels of spending, then the chance of being able to afford a more flexible lifestyle increases. As we’ve said though, this is just a guide and the best thing to do is work out what you will need, and our retirement experts can help guide you through this.

Recent changes have brought about more options and greater flexibility when accessing your pensions. With this flexibility there is potential for increased risk and the chance of making poor decisions, and therefore taking advice is arguably more important than ever.

There is a lot of information out there these days, which could help you, but if you’d rather not rely on what your mates in the pub are saying, then you can download our guide to your retirement options.

You can usually begin using your pensions from age 55, although the government confirmed plans to increase the minimum pension age from 55 to 57 from 2028, alongside planned increases in the State Pension age to 67. From then on, the minimum pension age will remain ten years below State Pension age.

There are also some circumstances when you may be able to take money from your pension even earlier than 55, such as if you’re in poor health or in a profession where your normal retirement age is earlier e.g. sports professionals. Some pension schemes, usually those which are work related, have a protected pension age lower than 55.

Along with ‘How much should I pay in’ this is a personal thing and isn’t a one size fits all approach, although there are theories out there about ‘safe withdrawal rates’ which look at predicting how much you can withdraw from your pension without severely depleting it or running out altogether. This would only apply to income drawdown plans, as defined benefit schemes and annuities provide a fixed and guaranteed amount each month.

It might sound obvious but making sure you don’t run out of money later in life is a key factor in good financial planning!

Financial planners often use cash flow modelling – check out our video which explains more about how this is used to help predict what might happen in the future, and to support you in making good decisions now and in the future.

The financial side of divorce can be complicated and contentious at times, as any workplace or private pensions that you or your partner (husband, wife or civil partner) had will be assessed when dividing the assets. In Scotland, only the pension that was built up during marriage or the civil partnership is taken into account.

This can reduce what you have to use in retirement, and as such, looking at ways to boost your retirement savings might be something to consider.

If ill-health prevents you from working then you may be able to take your pension benefits early, sometimes before the age of 55.

This will depend on the particular rules of the pension(s) you have, so it’s worth checking with your employer or the provider. It will also depend on your condition and whether it meets the definition of ‘ill-health’ or ‘serious ill-health’.

Anyone in serious ill-health (with less than one year to live) may have the option of taking their pension in full as a lump sum.