• Home
  • Authors
  • Write for us
  • Advertise
  • Contact
  • Privacy Policy
  • Terms and Conditions
Thursday, March 4, 2021
No Result
View All Result
ABC Money
PR Fire Press Release Distribution
  • News
  • Business
  • Economics
  • Finance
    • Investment
    • Tax
    • Mortgage
  • Property
    • Utilities
  • World
  • Technology
  • Fashion
  • Health
  • Holidays
  • News
  • Business
  • Economics
  • Finance
    • Investment
    • Tax
    • Mortgage
  • Property
    • Utilities
  • World
  • Technology
  • Fashion
  • Health
  • Holidays
ABC Money
No Result
View All Result
Home Finance

Making Sound Pension Decisions in Uncertain Times

by Sam Allcock
24/11/2016

Everyone was watching when the Brexit vote was taken. No one followed that historic vote more closely, or the after-effects, than people in retirement or those about to retire. Many feared that billions in pension savings would be wiped away in a flash after the vote. Those preparing to retire had a hard time maintaining confidence in their investments while watching interest rates and the rates on annuities plummet to all-time lows.

There are options

One ray of good news is the changes made to pension rules in April 2015. These changes gave retirees more options than they previously enjoyed. Those over 55 now can choose from multiple options when deciding what to do with their savings. These options include taking larger sums in cash, staying invested or rolling savings into buy-to-let.

Some retirees may be a bit intimidated by these newly-found freedoms. Many may have a difficult time deciding what to do with their pension pots. Before deciding how to manage your pension, consider the strategies available to you.

Stay invested

One option, known as “drawdown,” lets retirees draw an income from their pension. This income may be dependent on corporate bonds paying fixed amounts of interest or companies dolling out nice dividends. The retiree takes out the amount needed and leaves the rest invested. The strategy here is to ride out stock market fluctuations and give investments more chances to grow.

Any remaining funds can then be passed along to beneficiaries without fear of inheritance tax.

This strategy does not guarantee your income, however. If your lifespan extends longer than expected or you spend too much, you could run out of money. A severe hit to the stock market would also render a massive hit to your pension fund.

Cashing in

If you are aged 55 or over, cashing in your pension pot is one of your options. Doing this, however, will subject the majority to tax. You’re allowed to take a 25 percent lump sum tax-free, but after that the tax for withdrawing the rest is set at your personal rate.

RelatedPosts

How to save money on your heating bill and get help with energy debts

5 Best Applications for Finance You Can Use in 2021

Good Money Habits That Will Improve Your Finances in 2021

Day trading: the advantages and disadvantages

Load More

The smart move here is to think about tax efficiency instead of thinking about a nice lump of cash tax-free. You would be able to do whatever you want with the money, of course, but it won’t be generating income for you. You also put yourself at risk of being bumped into a higher tax bracket with a large withdrawal.

Property investing

Some pensioners who prefer to have assets they can see, such as buy-to-let property. After the mortgage is paid off, the property may be able to generate retirement income. Property is not a tax-efficient retirement investment, however, and many predict that taxes here will grow in the future.

The amount of income generated can be undercut by mortgage costs, letting fees, maintenance and insurance costs, and there may be periods of no income when there are no tenants. Income generated by letting your property is taxable, too. That needs to be a serious consideration if you’re considering this option in these uncertain times.

 

 

Previous Post

Clinton Trumps Trump For British Punters

Next Post

City Investment Manager Faces Jail

Related Posts

How to save money on your heating bill and get help with energy debts
Finance

How to save money on your heating bill and get help with energy debts

02/03/2021
5 Best Applications for Finance You Can Use in 2021
Finance

5 Best Applications for Finance You Can Use in 2021

25/02/2021
Good Money Habits That Will Improve Your Finances in 2021
Finance

Good Money Habits That Will Improve Your Finances in 2021

25/02/2021
Next Post
How to obtain public funding for your innovative start-up

City Investment Manager Faces Jail

‘David and Goliath’ fight for finance to Downing Street – so they can stay open five days a week.

'David and Goliath' fight for finance to Downing Street - so they can stay open five days a week.

FORMER MILITARY CLERK PRETENDED TO BE AN SAS VETERAN WITH CANCER

FORMER MILITARY CLERK PRETENDED TO BE AN SAS VETERAN WITH CANCER

Latest News

How COVID-19 Pandemic Has Changed The Way People Move

How COVID-19 Pandemic Has Changed The Way People Move

03/03/2021
5 ideas for a relaxing day

5 ideas for a relaxing day

03/03/2021
How Watches Are The New Hottest

How Watches Are The New Hottest

02/03/2021
Top 3 Guide Ideas To Match Your Rolex Watch with Your Outfit

Top 3 Guide Ideas To Match Your Rolex Watch with Your Outfit

02/03/2021
How to save money on your heating bill and get help with energy debts

How to save money on your heating bill and get help with energy debts

02/03/2021
B2B Lead Generation: Strategies That Work

B2B Lead Generation: Strategies That Work

02/03/2021

Social

Contact

For editorial enquiries:

editorials@abcmoney.co.uk

For advertising enquiries:

advertise@abcmoney.co.uk

Top Topics

  • News
  • Business
  • Finance
  • Property
  • Technology
  • Investment

Guides

  • Best UK Bridging Loans
  • Best UK Secured Loans
  • Best UK Commercial Mortgages
  • Best UK Business Loans
  • Best UK Payday Loans
  • Best Sites for International Money Transfers
  • Best Press Release Distribution Service

Social

  • Home
  • Authors
  • Write for us
  • Advertise
  • Contact
  • Privacy Policy
  • Terms and Conditions

© 2020 ABC Money

No Result
View All Result
  • Write for us
  • Contact
  • About Us
    • Authors
  • News Desk
    • Business
    • Finance
    • Property
    • Technology
    • Investment

© 2020 ABC Money

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.