When you retire you still need food and shelter as an absolute minimum, but of course you will want to maintain the lifestyle to which you have become accustomed, so unless you can guarantee a large inheritance or windfall, then you need to provide yourself with a secure income for the rest of your life.
A well prepared pension plan which is regularly reviewed should go some way to providing you with a reasonable level of income in your retirement.
A final salary pension scheme uses contributions to invest in the stock market with no risk to the employee. You’ll receive a fixed amount based on your salary when you retire, along with other benefits for your dependants.
Do you have a final salary pension scheme and recently received a Cash Equivalent Transfer Value (CETV)? Accepting the lump sum offer may or may not be the right decision for you.
Death benefit options relate to the different ways your pension value can be distributed to surviving beneficiaries in the event of your death. There are different death benefit options based on the type of pension you have and the specific terms of that pension. You should always consult your (proposed) pension to uncover the details that pertain to your situation.
Pension contributions can reduce your tax liability, but restrictions on contributions exist, especially for high-income earners.
NEST — a defined contribution workplace pension scheme — was set up by the UK government to facilitate auto enrolment. As a ‘qualifying’ scheme, NEST can be used by any and all UK employers to make pension contributions. Employers can auto enrol employees in NEST rather than setting up their own pension scheme.
Members can transfer other Defined Contribution pensions they may have into their Nest scheme, should they wish, and are also free to transfer out to another pension scheme, providing they have stopped making contributions into the NEST account.
Every payday, a percentage of the employee’s pay is deducted automatically from their salary or wages and invested in the scheme. The employer also contributes to the scheme on the employee’s behalf as does the government in the form of tax relief.
An annuity is a contract between an insurance company and a pension scheme member, where the member uses some or all of their pension savings to purchase a regular and guaranteed income for the rest of his or her life or for a predetermined number of years.
The factors that determine the amount of income you can expect to receive include (but are not limited to) your age, state of health, your postcode, prevailing annuity rates, the type of annuity you buy and the size of your pension fund.
Traditionally, when the time came to retire, most people with defined contribution (DC) pensions, either used their whole pension fund to buy an annuity or used the remainder to do so after taking their entitlement to tax-free cash (normally 25% of the fund). They did so because they either didn’t qualify for income drawdown or were not willing to accept (or were unable to afford) the associated investment risk.
A personal pension plan helps you save money for retirement and is available to any United Kingdom resident who is between the ages of 16 and 75 (Children under 16 cannot start a plan in their own right but a Legal Guardian can start one on their behalf). You, in conjunction with your adviser, choose the pension provider and make the arrangements for paying the contributions to the plan.
A Stakeholder Pension (SHP) is a type of Personal Pension Plan designed to provide an optional lump sum and income in retirement. In common with a Personal Pension Plan, Stakeholder Pensions are available to any United Kingdom resident under the age of 75. The minimum age for Stakeholder Pension is 55.
You, in conjunction with your adviser, choose the pension provider and make the arrangements for paying the contributions to the plan.
A State Pension is a regular payment made by the government to people who have paid or been credited with a minimum amount of Class 1, 2 or 3 National Insurance Contributions and have reached State Pension age.
SSAS — also known as a Small Self Administered Scheme (SSAS) — is a company pension scheme, the members of which are usually directors and key employees of the sponsoring employer.
Whilst subject to the same rules relating to contributions and benefits as a normal company pension scheme, SSAS schemes have considerably more flexibility and control over the investment policies and the scheme’s underlying assets. Contributions by individual members qualify for tax relief. Whereas contributions made by the employer might be deductible against profits, subject to certain conditions.
Executive Pension Plans (EPP) are tax-efficient savings plans set up by the company for key employees. The employer (and sometimes the employee) pays into the plan, to build a tax-efficient fund, which is used at retirement to provide tax free cash and a pension income. In effect, EPPs are money purchase occupational pension schemes and operate for the most part like any other pension scheme.
EPPs are normally established by company directors or other valued employees for their own benefit, though, only the favoured can expect to be given the levels of investment that these schemes offer.
A Self Invested Personal Pension (SIPP) is a Registered Pension scheme under the terms of the Finance Act 2004.
SIPPs are designed for investors who want maximum control over their pension without being dependent on any one fund manager or insurance company. As such, a SIPP requires active management and a degree of investment expertise. Furthermore, the charges (levied by the SIPP manager) may be higher than for a personal pension or stakeholder plan.
Unlike a standard personal pension, a SIPP holder has a much wider choice of assets to invest in, each of which can be selected to meet the individual's circumstances and requirements.
Long-term care planning is about taking measures to ensure you are equipped for any support or services you may need in later life. It’s about ensuring any compensation award and any right to means-tested benefits are protected. It is also about maximising your financial security.
Understanding your NHS Pension can feel overwhelming, but that’s where Wealth Genius comes in. We make it simple, helping you navigate the scheme, aim to maximise your benefits, and plan for the future with confidence. Whether you're dealing with annual or lifetime allowances, thinking about early retirement, or moving into private practice, we provide clear, expert advice tailored to you. With us by your side, you can worry less about pensions and focus more on what truly matters—caring for your patients and enjoying life beyond work.
