Has Your Pension Got Your Attention?

Shockwaves were sent through the pensions market following the covid-19 pandemic and economic crisis. If you are aged between 45 and 70 you should urgently review your pension pots and check that you are on course to enjoy a comfortable retirement.

Following Pension Awareness Week, which takes place every September, there is often a lot of information flying around about pensions and how best to be planning for your retirement years.

In this blog we collate the most useful points and explain how your accountant can play a valuable role in helping you to manage your pension and future proof for your retirement.

For assistance with pensions or any other personal finance questions, please contact us on 01403 337490 or email us at info@giltinan-kennedy.co.uk.

Concerning Statistics

It is estimated that 1 in 20 people have 'lost' a pension in their lifetime. This can easily happen when people move jobs and end up with multiple pension pots in different places. Often the only way that pension companies can contact you after you have left a workplace is by post and if the pension holder has moved address, then often the communication ends there. The average size of a lost pension is £23,000 so this could significantly impact someone's retirement years.

Reports from the IFS have warned that the state pension age will reach 72 years old by mid-2050. Many people might struggle to work past their late 60's or 70's and consideration will need to be given should a state pension not kick in until years after someone has stopped earning.

It is predicted that almost 75% of people nearing retirement age could see their funds run out by the time they reach their 80's. With people generally living longer and the cost of living rising, this is a major concern for retired individuals, the care home sector and the families of elderly relatives that may not be able to support themselves in their later years.

Given the worrying statistics, how can you stay in control of your retirement, plan ahead and maximise your savings?

How Can an Accountant Help with Your Pension?

An Accountant can play a valuable role in helping you manage your pension by providing financial expertise and guidance in several ways. They can also connect you with a trusted Independent Financial Advisor (IFA) and work alongside them to help you achieve your goals in the most tax efficient way.

1. Retirement Planning

Accountants can work together with an IFA to help you create a comprehensive retirement plan by assessing your current financial situation, including your income, expenses, assets, and liabilities. They can help you to realise your retirement goals and how much you need to save to obtain them.

2. Pension Contributions

Accountants can advise you on the optimal contribution levels to your pension, taking into account tax implications and employer contributions. They can help you maximise your contributions within legal limits to ensure you're saving efficiently for retirement.

3. Tax Planning

Accountants can help you understand the tax implications of your pension contributions, withdrawals, and retirement income. They can recommend strategies to minimise your tax liability during retirement, such as tax-efficient withdrawal strategies.

4. Compliance and Regulation

Accountants can help you navigate the complex regulatory landscape surrounding pensions. They can ensure that you comply with all legal requirements, such as contribution limits and reporting obligations.

Actions to Take

It is important to note that your pension and future savings plan will need to be considered at various points in your life, as you approach retirement and once you are retired. Over time your financial situation or goals may change and therefore your financial planning will need to be revised.

Some initial actions to consider:

• Locate your pension paperwork and keep it somewhere safe
• Check the status of your pension/s
• Enquire about moving any small pots into one to avoid losing them (some companies may have charges to do this, so assess whether this is worthwhile)
• Give some thought to when you would like to retire and your financial plan
• If you run your own business, think about your exit strategy or succession plan
• Consider speaking to an Independent Financial Advisor

Get In Touch

For bespoke and carefully considered advice on your personal finance and accounting, please do not hesitate to get in touch with our team of experienced accountants at Giltinan & Kennedy.

You can call us on 01403 337490, email us at info@giltinan-kennedy.co.uk or alternatively you can complete the quick contact form on our website by clicking here. We would be delighted to discuss your future financial plans with you.