Retirement Planning is now a holistic service where traditional pension products are compared with other investment options to achieve the goal of financial independence. Increased longevity means that individuals are wishing to retain their economically active status, if necessary by a portfolio of income sources in order to phase retirement gradually.
Since April 2015 there have been wholesale changes about how benefits can be drawn from pensions for those at retirement. Substantial improvements are offered regarding benefits from pensions on death as well, including the ability for pension funds to be inherited by beneficiaries. These new rules offer many opportunities for financial planning but there are also risks and challenges to overcome.
Restrictions to the Lifetime and Annual Allowances mean that careful planning is required to avoid, or mitigate, tax charges from exceeding these allowances.
- A particular speciality has been to advise members of the Judiciary of the relative merits of the 1981 and 1993 Judicial Pension Schemes prior to a decision being taken to retire or stay in service. This involves a detailed understanding of the New Judicial Pension Scheme (NJPS) options.
- Personal Pensions can be analysed in order to see if they remain competitive in view of new pension freedoms and Auto-Enrolment by means of O&M Pension Profiler computer software.
- Careful due diligence can be undertaken to compare the costs and benefits of Annuities and Drawdown.
- Salary Sacrifice arrangements remain popular as a means of sheltering from National Insurance Contributions and achieving tax neutrality.
- SIPPs can be used for purchase of commercial property, subject to careful adherence to strict rules, as well as quoted securities.