Pensions

Take Control of Your Pension

For many, a pension fund is their second most valuable asset after their home, yet until recently, few paid pensions much attention.

Pensions ‘happened’, money was taken from their salary each month and at retirement they received a generous lump sum and an index linked income for life – topped up by the state.

However, the demands of an aging population, the demise of final salary schemes and rock bottom annuity rates have radically changed the pensions environment; retirement planning is now the number one priority for DIY investors.

DIY Pensions is for those looking to take full control of their pension, those wishing to augment a state or workplace pension, or seeking to generate income in retirement.

Take Control of Your Pension

 

DIY PensionsWhat is a Pension?What is a Personal Pension?What is a Stakeholder Pension?What is a SIPP?Spotlight on SIPPsSelecting a SIPP ProviderIs a SIPP Right for me?Planning for RetirementBeware Pension ScamsOptions at RetirementWhat is an Annuity?

DIY Pensions

 

Until recently few dinner party topics would have brought proceedings to a premature conclusion faster than pensions; a murky world of inky fingered actuaries who somehow conjured up an income for us in retirement.

Not so the other side of the Pond; US citizens have long taken care of their retirement planning and the ‘401k/fifty-nine-and-a-half’ conversation has accompanied many a fudge brownie.

Back in Blighty, pressure on public finances, an enduring low interest economy and the demise of final salary schemes have heaped pressure on people to take more personal responsibility and the 2015 budget drove a coach and horses through the entire pension industry by removing the obligation to purchase an annuity and offering unfettered access to pension funds at age 55.

In Australia, under a similar regime, there have been stories of pensioners spending today and not giving a XXXX about tomorrow; here, fears of Saga louts queuing outside Harley Davidson and Fred Olsen have proven unfounded – there is every indication that Brits will be more circumspect, but may miss out on the lifestyle they could afford by being overly cautious.

DIY Investor is here to explore the options that are available to those seeking to either supplement their state or workplace pension, or wishing to take full control of their retirement planning.

DIY Investor delivers content from industry commentators and participants as well as practical experience from DIY investors to help you on your way; we look at how you can best accumulate funds as you build towards retirement, and how you can put your pot to work to deliver an enduring income once you get there.

What is a Pension?

 

A pension is a way of saving for your retirement; you make tax free contributions into your pension each month, and in return, you get a regular income once you’ve retired.

Planning for retirement is one of the key financial objectives that people face with three types of pension available – state pension, workplace pension and personal pension.

 

State Pension  

 

In 2015/16 the maximum state pension for a single person is £115.95 per week; in April 2016 the basic and additional state pensions will be replaced by a starting rate flat-rate pension of £155.65, with reductions or additions according to contributions.

 

Workplace Pensions

 

Defined contribution (DC) and defined benefit (DB) pensions – contributions made by an employee, often matched by an employer and topped up by the government.

DC schemes deliver a retirement pot based upon the success of its investment strategy; DB schemes deliver income based upon previous salary.

 

Personal Pensions 

 

An individually selected pension plan delivering returns based upon the amount and duration of contribution and the success of its investments

SIPPs – widest investment choice and freedom for the DIY investor.

 

 

pension

 

Read more

 

 

What is a Personal Pension?

 

When you consider that you could be retired for upwards of 30 years, it’s easy to see why saving for later life is so important. But how do you get started?

Designed to provide you with an income whenever you stop working, personal pension plans are one of the most popular ways to save for retirement.

Generally used to supplement the basic state pension there are no limits placed on the amount you can set aside in a personal pension plan, and the added bonus is that you’ll receive tax relief on any contributions up to your personal allowance.

The amount you pay into a personal pension is entirely up to you – a rule of thumb is that you should aim to contribute half your age as a percentage of your salary – they are known as defined contribution pensions.

 

Retirement

 

 

Read more

 

 

 

What is a Stakeholder Pension?

 

Stakeholder pensions are defined contribution personal pensions but with more flexibility and lower charges than standard personal pensions.

Stakeholder pensions are individual contracts between you, the member, and the pension provider – often an insurance company or an investment platform, but also a number of other providers, including banks and building societies.

They differ from normal personal pensions because their charges are usually lower and they are more flexible, although they may offer a limited choice in terms of the funds you can invest in.

The amount you pay into your stakeholder pension can be as low as £20 per month, and you can pay monthly or weekly, which may be particularly attractive to those that are self employed, not working or without certainty of income.

 

retirement 7

 

 

Read more

 

 

What is a SIPP?

 

A Self-Invested Personal Pension (SIPP) could be the answer for the confident DIY investor looking to take full control of their retirement planning.

First introduced in 1989, Self-Invested Personal Pensions (SIPPs) have grown in popularity are now used by over one million investors in the UK to save for their retirement. SIPPs are tax-efficient ‘wrappers’ that are put around investments to ensure they benefit from the considerable tax advantages that pension savings attract.

A wide range of investments may be held in a SIPP – from shares, unit trusts and bonds to commercial property, gold bullion and securitised derivatives – and the decision on what and when to buy, and when to sell is the investor’s to make. Successful investment choices may achieve a much bigger pension fund and retirement income than other types of pensions.

 

retirement3

 

 

Read more

 

 

Spotlight on SIPPs

 

More than one million people in the UK now have a Self Invested Personal Pension (SIPP) and demand continues to grow in the wake of the 2015 pension freedoms.

Giving control over investment decisions to the individual investor and the wide range of investment options are the greatest advantages of a SIPP and with fewer private companies providing final salary pensions and state pensions under duress, individuals will increasingly be required to make provision for their own retirement.

Internet technology has been a key enabler in the rise of SIPPs as platforms have made it simple to open, run, monitor and administer a pension entirely online, making them attractive to people who are comfortable making their own investment decisions.

A SIPP could be the place to consolidate any number of occupational and personal pensions in advance of retirement to create a manageable investment vehicle from which to generate an income in retirement.

 

retirement 6

 

Read more

 

 

Selecting a SIPP Provider

 

If you decide a SIPP is the right vehicle for you, you will need to decide whether you are best served by a low cost SIPP, a full SIPP or a hybrid SIPP; even then you will find quite some variation between providers, and a little time invested up front can prevent time consuming and potentially expensive remedial action down the line.

In most cases the low cost SIPP will deliver a more than adequate platform to the DIY investor with sophisticated online tools and data available at very reasonable cost.

Since RDR online brokers have changed their pricing models, with most charging a percentage fee based upon the value of the assets held within an account; some still charge flat fees and percentage based fees can sometimes be capped, so it is important that you compare various platforms based upon your own predicted trading activity and that you ensure that you are not penalised for becoming successful.

 

retirement 4

 

 

Read more

 

 

 

 

 

Is a SIPP Right for me?

 

A SIPP will not be suitable for everyone, but they may be attractive to those investors with larger pension funds who have the confidence and ability to make their own investment decisions and fully understand the risks and consequences of making those decisions.

Remember, you are investing funds that need to provide you with an income during your retirement and making the wrong investment decisions may mean that you do not have a large enough pension fund to allow you to retire at the age you would like to or have the lifestyle you would like to have during your retirement.

Before deciding upon how you are going to manage your retirement planning it is wise to consider all of the available options.

codger3

 

Read more

 

 

 

 

 

Planning for Retirement

 

It is not uncommon for pensioners to spend anything up to thirty years in retirement – and that’s assuming they work until their seventh decade; all that globe-trotting, golf and white knuckle rides on the Harley will add up to a pretty penny so it is imperative that the DIY investor puts a plan in place to ensure that they don’t miss a thing.

Ensuring that your current savings rate and investment regime are sufficient to support your desired future lifestyle is a difficult and potentially daunting process and even the most ardent DIY investor may decide that this is the point at which it is worth enlisting the help of a paid financial adviser.

However, there are some considerations that may inform your decisions and help you to get your retirement plan on the straight and narrow.

 

 

plan

 

 

Read more

 

 

Beware Pension Scams

 

With more and more people joining pension schemes or taking control of their pension pots under new, more flexible, pension rules, the Pension Advisory Service (PAS) has launched a campaign to raise awareness of pension scams to ensure that people are aware of very real risks of pension fraud and the consequences of transferring their savings.

HMRC estimates that £2.5 billion has been withdrawn from pension funds since April, with a study by True Potential suggesting that up to 64,000 people could have been exposed to scams yielding up to £400 million for the miscreants.

The campaign is intended to improve people’s knowledge of what a scam may look like, and also how they may be impacted in later life, should they fall victim.

 

snake oil2

 

 

 

Read more

 

 

 

 

Options at Retirement

 

Pension rules introduced on 6 April 2015 changed the pensions industry forever, freeing pensioners from the requirement to purchase an annuity with their fund and allowing them to decide when and how to take their pension.

Once they reach age 55, personal pension savers, can normally start to make withdrawals from their fund; up to 25% can be taken as a tax free lump sum, with any additional withdrawals taxed as income. This threshold will move to 57 from 2028.

There is no upper age by which retirement benefits have to be taken and therefore no requirement to take retirement benefits at all, should an investor wish to keep their pension invested.

What you do with your pension fund is a crucial decision and one that is relatively new, so with limited experience to call upon among your peer group that may be the time to take some advice to ensure that you understand your options and that your preferred option is the most appropriate for your individual circumstances.

 

choice2

 

Read more

 

 

What is an Annuity?

 

An annuity is a sum of money paid out in regular installments in return for the investment of a lump sum, such as a pension fund. If you have a personal pension or are a member of an occupational pension scheme, you will contribute to a pension fund over the course of your career. When you retire, the money in your pension fund needs to be turned into a regular income. An annuity is one option.

If you buy a lifetime annuity, the income will be paid for the rest of your life. If you were to die soon after buying the annuity, you would have ‘wasted’ most of your money. If, on the other hand, you lived to a 100, your annuity would still provide you with an income long after your savings might otherwise have run out. Annuities work much like insurance in this respect.

The income you will get from your annuity in your retirement will partly depend on how long the provider expects to have to pay out the income. The provider will look at your circumstances and will calculate how long people like you generally live and base its calculations on this. The longer you are likely to live, the lower your monthly income will be.

 

annuity

 

 

Read more

 

 

 

 

Compare Low Cost SIPP Providers

 

selftrade sipp

 

 

 

 

 

 

 

 

ST 220 x 75

wo2

Saga 220 x 75BF 220 x 75XO 220 x 75SDA 220 x 75CF 220 x 75

Strawberry 220 x 75 2

Sorry, this feed is currently unavailable or does not exists anymore.

     

    Introducing the Landlord’s Pension

    Introducing MoneyFarm

    Introducing Nutmeg

    Pension freedoms, one year on

    Introducing the Lifetime ISA

    Pensions in Three Minutes

    Introducing Self Invested Personal Pensions (SIPPs)

    Take Control of Your Retirement Planning

    State Pension Changes – Contracting Out

    What is a Pension?

    Jupiter Enhanced Distribution Fund

    15th


    Jul

    Saving up and drawing down; should you cash in a DB pension?

    With transfer values at record levels what should you consider before leaving a final salary scheme?

    Read More

    23rd


    Jun

    The UK Pension Map: how much are we saving?

    True Potential Investor looks at regional and gender variations in pensions saving - where do you

    Read More

    28th


    May

    ‘Retirement advice for the masses’ Wealth Wizards brings robo advice to pensions

    new planning tool aims to make financial advice accessible and affordable to all

    Read More

    16th


    Apr

    Building a Balanced Portfolio

    DIY Investor looks at the key things to consider when constructing your investment portfolio.

    Read More

    9th


    Apr

    Constructing a Portfolio of ETFs

    Why DIY investors are increasingly turning to ETFs when constructing their investment portfolio.

    Read More

    4th


    Apr

    The Lady’s not for Investing: Survey reveals 56% of women are failing to save for retirement

    A recent YouGov survey reveals women miss out on long term investment growth potential due to lack

    Read More

    23rd


    Mar

    The Lifetime ISA vs Occupational Pensions and SIPPs

    DIY Investor's pensions and savings expert Francis Moore looks at the new LISA and where it fits

    Read More

    2nd


    Mar

    Robo-advisers Target Pensions

    Having launched with investment and ISA accounts, robo-advisers are now partnering to offer SIPPs

    Read More

    10th


    Feb

    £600 Tax Perk for Wealthier Pensioners

    Government permits £1500 tax free cash withdrawal to pay for financial advice

    Read More

    22nd


    Jan

    Choose Life – Don’t Want Your (Pension) Freedom?

    Spend some time getting to grips with your pension and plan for the retirement you want

    Read More

    15th


    Dec

    Government Swats Away Call for Advice and Backs the Lifetime ISA

    Fears that LISAs will cannibalise auto-enrolment dismissed

    Read More

    26th


    Sep

    FTSE 100 pay and the BHS Pension Fund Deficit: Much Less Than six Degrees of Separation

    Top bosses now average £5.5 m p.a.; City Grump Manages to Find a Connection with the BHS Pension

    Read More

    13th


    Sep

    ‘Monster’ Robo-advice Tool Unleashed

    What's that coming over the hill? Looks like an automated pension advice platform.

    Read More

    15th


    Aug

    Too Much, too Young? Will Pensioners Outlive their Pension Pot?

    ABI Report Suggests that the Greyed British Public are Actually a Pretty Sensible Bunch

    Read More

    1st


    Aug

    Final Salary Schemes Under Siege as Funding Gap hits £1 trillion

    Pensioners tempted to cash in by schemes struggling to meet their obligations

    Read More

    9th


    Jul

    Brexit Threat to Pensions as Investors Seek Sanctuary in Bonds

    Falling bond yields fuel fears for UK pensions

    Read More

    9th


    Jul

    Government Eggs on NEST to Make Pensions Cheaper

    Those taking advantage of the new pension freedoms could see the cost of doing so fall dramatically

    Read More

    13th


    Jun

    Gold in Them Thar Pensions – Royal Mint Sells Gold Bars to Pension Savers

    Gold Bullion in Self Directed Personal Pension (SIPP) and Small Self-Administered Pension Schemes

    Read More

    27th


    May

    Fraudsters Target Pension Pots With Unregulated Investments

    As pensioners withdraw £6bn in the first year of pension freedoms the sharks are circling

    Read More

    8th


    Apr

    What is an Annuity?

    Pension freedoms removed the obligation to purchase an annuity - but what is an annuity?

    Read More

    26th


    Mar

    A Pension, an ISA or a LISA?

    With the launch of the Lifetime ISA, young savers now have another option for retirement planning

    Read More

    6th


    Mar

    No 11 in Pensions U-Turn

    Plans for flat rate pension tax relief scrapped

    Read More

    4th


    Mar

    Beware Pension Scams

    Pensions Advisory Service Launches Campaign to Raise Awareness of Pension Scams.

    Read More

    4th


    Mar

    What is a SIPP?

    DIY Investor looks at the pension wrapper that puts you in complete control

    Read More

    2nd


    Mar

    Is a SIPP Right for me?

    Things to consider before opening a SIPP

    Read More

    2nd


    Mar

    From Cradle to Later Life, SIPPs Offer a Lifetime Solution

    EPM's Francis Moore looks at the new pension regime and explains why you may consider a SIPP

    Read More

    1st


    Mar

    Make your Portfolio Tax Efficient

    Make sure your portfolio is as efficient as possible by making best use of all available allowances.

    Read More

    1st


    Mar

    Six of the best: potential pitfalls that can whack the unwary DIY investor

    Why the British Army's 'Rule of the Seven Ps' could help you be a better investor.

    Read More

    1st


    Mar

    Generating an Income from Investments

    With interest rates on savings near zero, how can you find income generating investments?

    Read More

    25th


    Feb

    Measure Twice, Cut Once – SELECTING AN INVESTMENT COMPANY FOR YOUR NISA

    The importance of planning and research in selecting the right investment companies

    Read More

    18th


    Feb

    Options at Retirement

    The choice used to be simple - you bought an annuity; now things look very different

    Read More

    17th


    Feb

    Sell Annuities from April 2017

    Pension freedoms extended to those that have purchased an income for life

    Read More

    17th


    Feb

    Selecting a SIPP Provider

    What to consider when selecting a SIPP provider

    Read More

    17th


    Feb

    High Five: Index Investing for the DIY Investor

    Why low cost, passive investing could be the ideal solution for the time poor DIY Investor.

    Read More

    16th


    Feb

    Spotlight on SIPPs

    DIY Investors takes an in depth look at the DIY pension wrapper

    Read More

    16th


    Feb

    What is a Stakeholder Pension?

    DIY investor looks at the low cost personal pension with maximum flexibility

    Read More

    12th


    Feb

    What is a Pension?

    Considering the state pension, workplace pensions and personal pensions

    Read More

    12th


    Feb

    What is a Personal Pension?

    DIY Investor looks at defined contributon pensions

    Read More

    11th


    Feb

    Saga Louts Warned They Could run out of Money

    Recent survey reveals that thousands could run out of cash many years before they die

    Read More

    4th


    Feb

    If You Don’t Know Where You’re Going, Any Road Will Lead You There

    You’ve worked hard for it, you deserve it - but what will your retirement look like?

    Read More

    14th


    Dec

    An ISA or a Pension, that is the Question…

    Daniel Hawkins weighs up the relative merits of ISA and Pension saving

    Read More

    5th


    Nov

    Retirement Realities: What Lies Beneath the Income Gap?

    A recent survey has revealed the gap between expectations and reality in retirement.

    Read More

    27th


    Oct

    Take it to the Max – Trading Dividends for Maximum Income

    Mark Riding explains how DividendMax can be used to deliver predictable income from investments.

    Read More

    15th


    Oct

    It’s all a Matter of Trust

    How well managed investment companies can deliver the right balance of income and growth.

    Read More

    25th


    Sep

    The Six Big Changes To Your Pension

    ‘Responsibility is the Price of Freedom’ (Elbert Hubbard)

    Read More

    26th


    May

    Investing In Retail Bonds

    As demand outstrips supply, why might you consider retail bonds?

    Read More

    27th


    Oct

    Enjoy Flexible Income in Retirement – But Don’t Lose Focus on the Taxman

    Those taking advantage of pension reform are urged to be wary of the taxman

    Read More

    12th


    Jan

    Protect Your Investment Portfolio

    DIY Investor Considers the Relative Merits of SIPPs and ISAs When Saving for Retirement

    Read More
    D2 Interactive