It can be difficult to understand how your different assets fit together and how you can use them to reach retirement goals. This is an area we can help you with. If you have a Final Salary pension, you may be considering transferring out. At retirement, you do have the option of giving up the benefits of a Final Salary pension and, instead, receiving a lump sum which must be transferred to a Defined Contribution pension.
Receiving a lump sum can seem attractive. However, a guaranteed income for life is often more valuable. Please contact us to discuss your Final Salary pension and what it means for your retirement lifestyle.
Usually, there are ways to create a flexible income stream that will suit your goals whilst retaining the security offered by your Final Salary scheme.
Please get in touch or call A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.
I have read and agree to the Privacy Policy. Understanding your Final Salary pension — What income will it provide? What is a Final Salary pension? With a Final Salary pension, your income is guaranteed for life.
This removes this element of uncertainty. Find out how to review your existing pensions. When a company decides it no longer wishes to run a final salary pension, it has a few options. It may simply decide that it will not offer such pensions to new staff, while allowing existing workers to continue paying into and benefiting from the scheme.
Anyone who is already taking their pension under a final salary scheme is unlikely to be affected by any such changes, however. Where final salary pensions have been phased out, they have generally been replaced by defined contribution DC schemes , also known as money purchase pensions.
These involve workers putting aside a certain proportion of their salaries every month, along with a contribution from their employer, to make stock-market investments.
These investments are then used at retirement to generate a pension income, either by buying an annuity or by leaving the money invested while making regular withdrawals. The key difference with DC pensions is that the level of pension income depends on investment performance and is not guaranteed by the employer.
By switching from a final salary scheme to a DC pension, the risk that investments might do badly is transferred from the company to the employee.
The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation. To calculate the total pension value for a final salary, you need to multiply your expected annual pension by 20 and add this figure to the amount of any tax-free, cash lump sum from that pension.
It's possible to take your final salary pension all at once, but you need to think about what the tax implications are and how long you need your final pension salary to last - which is as long as you do.
You will also lose the associated benefits and you need to weigh up if this is right for you. The Government's Pension Wise service offers free, impartial guidance to help you understand your options at retirement. You can access the guidance online at moneyhelper. This information is not a personal recommendation for any particular product, service or course of action. Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest.
When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser.
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