There have been many changes to UK Pensions over the years which you need to be aware of, especially as the pensions gap is growing in the western world.
British expatriates saw the minimum age at which you can start taking your private or company pension rise from 50 to 55 in April 2010. This was part of the 2006 Pension legislation changes, which were brought in to make pensions simpler. Those with the smallest and largest pension pots are those who were most affected by changes in legislation but even for those in the middle, especially those around retirement age at the moment, a little forward planning could still be very rewarding.
The pensions gap remains an emotive phrase for those with a UK pension. If your anticipated retirement income falls short of your anticipated retirement outgoings, you have a pension gap. A pension gap indicates that you will not have enough money when you are retired to facilitate the kind of lifestyle you aim to enjoy as a pensioner.
Essentially there are only two main ways to close a pension gap: save significantly more now for your future or retire later and save more gradually.
The right route for you will depend on the size of your pension gap. If you fall short of your desired income by a small amount, perhaps a thousand pounds a year, there may be short-term changes you can make today to increase your savings, or retirement outgoings that you would be willing to forgo instead. If you fall short by several thousand pounds a year, you will need to look more carefully at the ways in which you could make up the shortcoming.
Those facing pensions gap, especially those in government schemes, are already looking at ways to reduce the risk of retiring without sufficient money.
Don’t forget to look at your State Pension forecast. Currently the full pension is around £87 a week if you have paid your National Insurance contributions in full, or around £52 a week if your pension is based on your husband’s fully paid up National Insurance contributions. If you are not forecast to receive the full State Pension, investigate why this is. You might be able to fill gaps that appeared in your National Insurance record when you were studying, travelling or looking after young children, by making back payments now. In this way you can increase the State Pension you will be entitled to when you retire.
Equally anyone with a significant UK pension that is dormant, should really consider moving it to QROPS and maybe even QNUPS.
The Holborn Pensions Team includes a number of highly qualified members of the UK’s Personal Finance Society who are eminently qualified to discuss and advise on all matters of Pension including frozen schemes and potential transfers.
Contact a qualified Holborn Assets adviser for the best advice.