Pensions Awareness Week: let’s talk about retirement planning

This week is Pensions Awareness Week, and although retirement may seem a long way off for some of us, there’s lot’s to think about on your pensions journey. Do you know how much you are contributing and how close you are to your tax-free limit? Are your nominated beneficiaries up-to-date? Should you think about consolidating all of your pensions?

There is so much to consider, and so on 13 September, Mark Shay, Strategic Partnership Development Manager at Schroders Personal Wealth, hosted our webinar – It’s time to talk about planning for retirement - with a panel of experts:

• Marie Kilgallen, Senior Associate, Irwin Mitchell Solicitors

• Laurence Clark, Strategic Relationship Manager, Scottish Widows

• Simon-Luc Farrow , Personal Wealth Adviser, Schroders Personal Wealth

The webinar covered:

• An introduction to pensions and the importance of planning for retirement

• The 2023/24 pension allowance changes and how they may impact you

• Pension consolidation and options at retirement

• Support available to you

Introduction

As an introduction, pensions are basically a long-term savings product that allow you to save in a very tax efficient way. There are various types of pensions: private pensions, workplace pensions, and of course the State Pension. If retirement is a long way off for you, it may feel easy to push this topic away until a later date, but there are few important things you should be regularly doing.

For example, are your nominated beneficiaries up to date on all your pensions? Do you know how up to date you are with your National Insurance (NI) contributions? You will only get the full State Pension amount if you are on track to pay your full 35 years of NI contributions. Are your personal details up to date on all of your pensions. Right now there is an incredible £26 billion of unclaimed pensions in the UK! (1)

2023/2024 pensions allowance changes

Most of us will be aware of the Spring and Autumn Statements by the government that affect our tax and benefits. But we may not always pay particular attention to any pension changes that are announced, or really understand how these apply to us.

There were changes announced in the 2023 Spring Statement, that altered the annual limit you can contribute tax-free to your pension, as well as doing away with the Lifetime Allowance. To really understand how these changes affect you, you’d need to have a very good grip on all of your pensions and what you currently pay in.

The panel run through in detail things you need to consider regarding these changes.

Pension consolidation and options on retirement

An obvious positive to consolidating your pensions is the ease of managing them and keeping track of how big your pot is and how much you are contributing. But it’s not a simple decision as there are pitfalls. Changes in legislation have meant that moving some older pensions to a new provider could mean losing some of the benefits that were attached to that pension. This is where an expert could really add value to advise what options are best for individual circumstances.

The panel also discuss other important considerations, such as pensions and divorce, and passing on your pension as part of your estate, as well a range of support tools that are available to help you understand more about pensions and your retirement.

Source:

(1) Research reports and Briefing notes - Pensions Policy Institute, October 2022.