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How many pensions do you have? It’s not unusual if you’ve been working for a while to have several personal and workplace pensions. Multiple pensions can mean a lot of paperwork and make it difficult to get a picture of your overall pension planning and whether you’re saving enough to keep your goals on track.

But, before you decide to consolidate your pensions, you should consider the following:

  1. If you transfer a pension plan, will you be charged an exit penalty or face a market-value adjustment (MVA) by your pension provider?
  2. Will you lose any valuable benefits? Important benefits could include guaranteed annuities, minimum pensions, enhanced tax-free lump sum entitlement or even a protected pension age.
  3. What death benefits does your scheme offer? Is it a return of contributions or a return of fund value upon death?
  4. Who should inherit your pension on your death? Have you updated your will? For example, will it be paid to your beneficiaries as a lump sum, or are there other income options available to them?
  5. Does your scheme offer a range of investment choices? Can you access the investments you want to meet your objectives? Do you have a regular process to check whether your pensions are on track to meet your retirement needs?
  6. Retirement options – what options are available for your retirement? Can you facilitate your retirement income and /or capital via your pensions?
  7. Charges – what are the costs of operating your existing arrangements? Can you save money by bringing them together?
  8. Decisions – are you happy making your own investment decisions or would you benefit from working with a professional?
  9. Lifestyle – is your pension in a lifestyle investment solution that is designed to reduce your equity exposure over a 10/15 year timeframe? Whilst a useful solution in principle, for some it isn’t the correct option so it is worth checking how your pension investments will change as you approach retirement.
  10. Responsible investing – Is there a particular industry and/or practice that you prefer not to invest in? Does your current range of investment choices allow you to invest in a manner that appeals to your social, ethical or environmental values.

It can be invaluable working with an expert adviser, understanding your retirement options to avoid making mistakes which could compromise your objectives.

Remember – the 2022/23 tax year ends on 5th April 2023

The end of the tax year is just around the corner so you should start finalising your plans to utilise remaining allowances before it is too late.

Here are  a handful of useful tips and allowances which you may wish to consider prior to the tax year end:

  • Capital Gains Tax (CGT) Exemption – £12,300 for 2022/23. Holding investments outside of a SIPP or ISA wrapper, such as stocks and shares in an Investment Portfolio or a General Investment Account (GIA) could mean you have to pay CGT on disposal. However, with careful planning any impact can be mitigated.
  • Even if you have no relevant UK earnings (or earn less than £3,600 a year) you can still contribute to a personal pension. The maximum you can contribute is £2,880 a year. Tax relief is added to your contribution, so if you contribute £2,880, £720 is claimed from the government and added to your pension. This means a total of £3,600 will be contributed to your pension scheme.
  • Your Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £125,140 or above. In Scotland, you have an effective rate of income tax of 61.5% for any earnings between £100,000 – £125,140. You may be able reinstate your personal allowance and child benefit entitlement (in part or wholly) and reduce your taxable earnings by making a personal pension contribution.

Have you made the right plans for a secure financial future?

Start talking to us today about your pensions, and we can help you plan for a more resilient future. We take the time to understand your goals and objectives to ensure our advice is specific to your needs and aspirations. We have proven experience delivering financial plans for individuals, families, trusts and companies. To discuss your circumstances in confidence, please contact us directly on 0131 514 2770 or email to arrange a no-obligation meeting.

It can be invaluable working with an expert adviser, understanding your retirement options to avoid making mistakes which could compromise your objectives.

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