“FREEDOM” NOT TO HAVE ONE!

The first “Freedom” one has is not to have any pension at all! If you are self-employed, you do not have to contribute to a pension (other than the State Pension) and even if you are employed, you can opt out of the company’s Workplace Pension. Clearly, however, there is not much value in a "Freedom” which means you have very little to live on in retirement.

A number of people plan to use other sources of income in their later years such as renting out property or down-sizing to recover value from their own property. We would advise all our clients to use pensions to provide at least part of the income they will need in retirement. If you are unsure of why this is a good idea, do take advice.

PENSION FREEDOM?

It is now 3 years since the Government launched changes to pension regulations which they called “Pension Freedom”.

Essentially they made changes which gave more choices as to how you can use your pension savings when you reach pensionable age. It is worth knowing your options if you are 55 or older or approaching age 55. We can use our experience and expertise to help if you have questions.

The choices we examine here primarily relate to personal pensions, also called “Money Purchase” and “Defined Contribution” pensions. If you have a Final Salary Pension (also known as a Defined Benefit Plan), you will need to seek advice from your pension provider as the rules are often different from scheme to scheme.

DON’T FORGET THE “RENT-A-ROOM” SCHEME

Do remember that, if income is tight, you can make tax-free income by letting out a room or rooms in the property you live in. Up to £7,500 can be earned this way with no tax liability.