Building wealth often takes years of hard work, but without proper planning, it can quickly diminish within your lifetime and may not endure for future generations. We aim to collaborate with you to create a well-thought-out plan, ensuring you are prepared for whatever lies ahead.

Importance of Trust and wealth planning

Preserving wealth can be challenging. Threats include unprepared beneficiaries, asset mismanagement, family dynamics, taxation, and legal disputes. However, with sound wealth planning, these challenges can be mitigated and sometimes eliminated altogether.

Benefits of proper wealth planning
Tax-efficient wealth structuring: Optimise your wealth to minimise tax liabilities.
Risk reduction: Protect your wealth from potential risks.
Liquidity provision: Ensure access to funds when needed.
Confidentiality maintenance: Keep your financial matters private.
Minimised family conflict: Mitigate disputes among family members.
Business succession planning: Facilitate smooth business transitions.
Philanthropic enablement: Support your charitable interests effectively.

Save taxes and manage your financial affairs

When planning how you’d like to pass on the assets and capital in your estate, you can use some important financial tools. Trusts are very effective when undertaking planning, helping you save taxes and manage your financial affairs well.

A Trust is a legal arrangement designed to secure your assets for your beneficiaries. Think of it as a figurative security deposit box or treasure chest, where you can place your assets for protection and potentially shield them from certain taxes.

Trusts separate assets’ legal ownership from their beneficial ownership. The legal owner holds the title and is empowered to deal with and administer Trust assets, while the beneficial owner—as the name suggests—derives the benefit from them. This could be in terms of usage, income from those assets, or sale proceeds. However, tax savings are not the sole reason for establishing Trusts. For many, the primary goal is to safeguard funds for vulnerable beneficiaries, such as young children, individuals with disabilities, or those who struggle with managing money.

Why use Trusts?

Protection of vulnerable beneficiaries: Ensure financial security for those needing extra support.
Continued control over assets: Maintain influence over how and when your assets are distributed. For instance, through your Will, you can use a Trust to provide a home for a remarried spouse while ensuring that the property eventually passes to children from a previous marriage.
Efficient probate process: In England and Wales, probate can take approximately nine months to a year, causing delays in transferring your estate. Assets held in a Trust typically sit outside your estate, allowing executors to access them without delay. Trusts are versatile tools that help control your gifted assets while ensuring timely and secure transfers to your beneficiaries.

Gaining control through Trusts

A person known as the ‘settlor’ places assets into a Trust, which may include money, property, or other types of assets like life insurance policies and investment portfolios. This may be done during their lifetime (a lifetime trust) or can be triggered by death through a valid will (a Will trust). By placing the assets into this structure, the original owner may relinquish some of their rights and delegate responsibility to a trustee during their lifetime.

However, they can gain a lot more control in other ways. A settlor can project their wishes years into the future. Provided a Trust is set up correctly, you can determine who gets what and when with a good deal of precision. Trustees can be professionals (who work for a trust company) or any other competent person prepared to take on these responsibilities.

Very wide-ranging powers and tasks

Trustees can have wide-ranging powers and tasks, including settling tax bills and hiring investment management and legal professionals. If the trust is discretionary, meaning they have discretion regarding the distribution of assets, they might also have to make certain decisions about how to use the trust income and/or capital.

For these reasons, many prefer to have their trust administered by professionals, paying them annual fees from the Trust’s assets.

However, others looking to structure family wealth may appoint a mixture of professional and family friend trustees to create a balance of objectivity and personal knowledge of the beneficiaries’ situations and needs.

Emotional aspects of trust management

Combining professional expertise with personal familiarity can ensure that both the technical and emotional aspects of trust management are adequately addressed.

Professional trustees bring technical know-how and impartiality, while family friends may offer deeper insight into the beneficiaries’ circumstances.

By thoughtfully selecting Trustees, you can achieve effective and empathetic management of your trust, ensuring that your wishes are fulfilled as intended. A blend of professional and personal trustees can provide a balanced approach, safeguarding the beneficiaries’ financial and personal interests.

Types of Trusts

Various types of Trust are available, and the Settlor needs to decide which type is best suited for the circumstances.

A quick summary of the principal types of trust is as follows:

Bare/Absolute Trusts – Where the settlor transfers the legal ownership of assets to the trustee for the benefit of the beneficiary absolutely.
DiscretionaryTrusts–The beneficiary has no entitlement to income or capital from the assets held under trust. All distributions are entirely at the trustees’ absolute discretion.
Interest in Possession Trusts–The beneficiary holds a right to the trust fund’s income or the right to use trust assets.
Flexible Trusts–The beneficial interests of these trusts can be altered.
Note that these are just a few examples; many other types of trust can be used under different circumstances.

Tax planning and Trusts

It’ll be of no surprise that one of the main reasons for using Trusts is for tax planning and mitigation. For example, when an individual dies, their estate (i.e., net assets) is subject to Inheritance Tax (IHT), meaning the beneficiaries may lose up to 40% of their net inheritance.

If assets are put into trust during a settlor’s lifetime and they survive seven years, they are not part of the estate on death and may escape IHT at that time, subject to the 14-year rule. Trusts are used in certain IHT planning arrangements for the settlor’s benefit, such as Gi% and Loan Plans, Discounted Gi% Trusts, and Flexible Reversionary Trusts.

Trusts in Wills

Trusts are frequently created in Wills, particularly where the beneficiaries are minor children who need someone to look after them financially. Any asset left to a minor under a Will is effectively held in trust for the minor by the executors until the minor reaches majority unless the will allows payment to be made to a parent.

Trusts can be explicitly created in Wills to ensure that a beneficiary does not benefit until some other age is attained or a condition is fulfilled. There are many other reasons for setting up trusts, notable examples being to provide a pension, provide for families, assist a charity, give property to those who legally cannot hold it, and gain protection from creditors and business protection.

TIME TO CREATE A PERSONALISED PLAN THAT PROTECTS YOUR WEALTH AND LEGACY FOR FUTURE GENERATIONS?

We understand that the wealth you wish to protect encompasses more than traditional assets. Please contact us to discuss your requirements and create a personalised plan that protects your wealth and legacy for future generations.

THIS GUIDE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE ESTATE PLANNING, TAX ADVICE, WILL WRITING OR TRUSTS.

THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

How to recover quickly and minimise the impact should the worst happen

Whether you’ve been in charge of a successful business for several years or have only recently started up your own enterprise, it’s important to understand the challenges and potential pitfalls and to think of ways of minimising their impact.

How much is a key employee worth to a business? And how would, or could, that business cope without them? Many private businesses rely on one key person. Financial protection is vital to allow your business to recover quickly and minimise the impact should the worst happen.

KEY EMPLOYEES ARE VITAL TO A BUSINESS

Business protection helps to protect a business should a director, partner, member or key employee suffer a critical illness, become unable to work due to a disability or die prematurely. It helps to make things right when things go wrong. Key employees are vital to a business.There are several different types of business structures in the UK, all governed by different rules that determine the business’s legal status and how it is run. “these rules include the amount of tax you pay, who is entitled to the profits, and who is liable for any debts run up by the business.

TYPE OF BUSINESS AND ITS PARTICULAR NEEDS

Business protection is available for partnerships (including limited liability partnerships), shareholders, sole traders and key employees. It can also be used to ensure repayment of a business loan in the event of the death or critical illness of a partner, key person or sole trader. How the arrangement is set up will depend on the type of business and its particular needs. Losing one or more of your key employees can cause disastrous problems. Sales may be lost. Credit can become more difficult to obtain. Profits may shrink. Momentum may be lost. Also, hiring and training a replacement will cost you time and money.

PROTECTING BUSINESSES EVERY STEP OF THE WAY

Most astute business owners insure physical assets from destruction. But when it comes to a business owner’s most valuable assets – key employees – many forget to take the same precautions. Whatever type of operation you run, if successful, will grow and evolve over the years. If you’re just setting up your first business, the challenges you face may be very different from those you may encounter ten or twenty years later.

To help you understand more about these risks, consider these key areas:

KEY PERSON INSURANCE

It is designed to compensate a business for the financial loss brought about by the death or critical illness of a key employee, such as a company director or other integral staff member. It can provide a valuable cash injection to the business to aid a potential loss of turnover and provide funds to replace the key person.

You cannot replace the loss of a key person, but you can protect against the financial burden such an event may cause. Without the right cover in place, you could also risk losing your business. Key person insurance can be utilised in several different ways – for example, to repay any loans taken out by the key person, to help recruit and fund the training costs for replacement staff, to meet the ongoing expenses while the level of sales recovers; or to facilitate payments for outside consultants or expert advice that may be required.

Businesses need to be insured, but covering the risk of losing a key employee is not legally required. Because of this, it’s easy for businesses to overlook this protection. But remember, your employees are your most valuable asset.

SHAREHOLDER AND PARTNERSHIP PROTECTION

This provides an agreement between shareholding directors or partners in a business, supported by life assurance, to ensure that there are sufficient funds for the survivor to purchase the shares. It is designed to ensure that the remaining partners or directors retain control of the business, but the value of the deceased’s interest in the business is passed to their chosen beneficiaries in the most tax-efficient manner possible. The shares might pass to someone without knowledge or interest in your business. Or you may discover that you can’t afford to buy the shareholding. It’s even possible that the person to whom the shares are passed becomes a majority shareholder and is in a position to sell the company. The shareholding directors or partners in a business enter into an agreement that does not create a legally binding obligation on either party to buy or sell the shares but rather gives both parties an option to buy or sell. For example, the survivor has the option to buy the shares of the deceased shareholder, and the executors of the deceased shareholder have the option to sell those shares. In either case, the exercise of the option creates a binding contract; there is no binding contract beforehand. This type of agreement is generally called a ‘cross option’ agreement.

CROSS OPTION AGREEMENT

This is also known as the ‘double option’ or ‘put and call’ agreement. By taking out a cross-option agreement, you will determine what will happen to the shares in the business if one of the owners dies or becomes critically ill. This agreement mustn’t be binding regarding the sale of the shares because this will prevent you from claiming relief from Inheritance Tax.

OTHER PROTECTION OPTIONS AVAILABLE

There are various options to choose from, including life cover only, critical illness cover, or combined life cover and critical illness cover. You can select different levels of cover and terms depending on your specific requirements, and policies are available that pay out a regular income in the event of sickness.

CALCULATING THE LEVEL OF COVER REQUIRED

The cover required is typically measured by reference to the key person’s contribution to the business’s profits. This may be based on the following information: past profits and projections for the future; the effect that the loss of the key person would have on future profitability; the anticipated cost of recruiting and/or training a replacement; the expected recovery period, for example, the length of time before a replacement is effective; and the amount of any loan(s) that would be called in on the death of the key person. The death or prolonged illness of a business partner, key employee or shareholder could put your business under considerable financial strain. No one can predict what will happen in the future, but you can ensure that you have the right protection to keep your business successful should the worst happen.

RELEVANT LIFE COVER

A relevant life policy is an alternative way for an employer to set up life cover for a key employee efficiently, without using a registered death in service group life scheme to benefit the employee’s dependents.

THIS GUIDE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE. A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).

THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.

RECEIVED AN INHERITANCE, WINDFALL, OR PROCEEDS
FROM A BUSINESS OR PROPERTY SALE? BUT WHAT NEXT?

Receiving a lump sum of money, whether from an inheritance, windfall, or proceeds
from a business or property sale can be exciting and overwhelming. Deciding where to
invest this money is crucial, and with numerous options available, it can be challenging to
determine the best course of action.

Knowing where to put a cash windfall can be difficult, particularly in times of market and economic uncertainty. We explore ways to invest your lump sum to help you make an informed decision and ensure you maximise your financial growth and security.

ASSESSING YOUR GOALS

The right decision for you will largely depend on what you want to do with your money and your needs and goals, which we can help you assess. In the meantime, here are some of the main options to consider.

CASH SAVINGS ACCOUNT

A cash savings account is a good choice if you want to use your lump sum to fund short-term goals – a holiday or new car, perhaps – or if you’re not quite sure what to do with it yet. By holding your lump sum in a cash savings account instead of investing it in the stock market, you won’t risk your money falling in value just before you need to access it.

If you don’t need your money for several months, you may wish to consider a notice or fixed-term savings account, as these may offer higher rates than easy-access savings accounts. It’s always worth shopping around to ind the best rate on your savings, as a difference of only 0.5% could significantly impact large sums of money.

UK GOVERNMENT BONDS

UK government bonds (‘gilts’) could be an attractive choice if you want to use your windfall to fund a medium-term goal. Gilts are secure savings vehicles guaranteed by the government and listed on the London Stock Exchange.

If gilts are held inside an Individual Savings Account (ISA) or other tax-free wrapper, there is no Capital Gains or Income Tax to pay. If held outside of an ISA or similar, gilts are free from Capital Gains Tax when you profit from a trade, but any income you get is subject to Income Tax.

STOCK MARKET INVESTMENTS

For longer-term goals, such as retirement or leaving a legacy for the next generation, you may wish to invest a portion of your lump sum in the stock market. Although the stock market is volatile, history shows that it tends to outperform cash and bonds over extended periods. You should be comfortable committing your money for at least five years, ideally longer. This will hopefully give your investments time to recover from any stock market downturns.

One way to reduce risk is to spread your money across different asset classes, such as equities, bonds and cash, as well as across sectors and regions. This is because different assets, sectors and regions tend to perform differently under various market conditions. We can assist you in building a diversified portfolio that suits your needs and attitude towards risk.

INVESTMENT ISA BENEFITS

If you haven’t utilised your ISA allowance this year (2024/25), investing your lump sum in an Investment ISA will potentially allow it to grow over the long term while also shielding it from Capital Gains Tax (CGT) and Income Tax. If you sell investments outside of an ISA, you could be taxed on your profits above your annual CGT exemption.

Additionally, if your investments pay dividends or interest, this could be included when calculating your overall Income Tax bill, potentially pushing you into a higher Income Tax bracket. The ISA allowance currently stands at £20,000. It is a ‘use it or lose it’ allowance, meaning you cannot carry it forward from one tax year to the next.

MAXIMISING PENSION CONTRIBUTIONS

Another option is to maximise your annual pension allowance. You can invest up to £60,000 or 100% of your UK relevant earnings, or £3,600 if you have no relevant earnings (whichever is lower) into pensions yearly and benefit from Income Tax relief up until age 75. Income Tax relief provides an immediate boost to your personal pension contributions, helping to increase how much money you have at retirement.

In some circumstances, you might be able to ‘carry forward’ unused annual allowances from the previous three tax years. Remember that your pension annual allowance might be lower than £60,000 if you earn a high income or have already flexibly accessed your defined contribution pensions. We can help you determine how much your annual allowance is and whether making a pension contribution is the right choice for you.

 READY TO DISCUSS HOW TO INVEST A LUMP SUM OF MONEY?

If you come into a lump sum of money, you’ll need to decide how best to use it. Please contact us for further information and personalised advice. We are here to help you make the most informed and beneficial decisions for your financial future.

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE.

FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

How you invest in your 50s could significantly impact your quality of life in retirement.

While there is still time to increase your retirement savings, a seemingly simple mistake could derail your plans. This is where obtaining professional financial advice becomes crucial.

With retirement now insight, as you approach this milestone, ensuring your money works effectively will allow you to enjoy retirement on your own terms.

CLARIFY YOUR GOALS

‘Saving enough for retirement’ has likely been on your list of financial goals for some time, but now is the moment to become more specific. Knowing exactly how much you need to save will give you a concrete target. This amount will depend on factors such as your intended retirement age, your retirement plans, projected investment growth and inflation.

A financial adviser can demonstrate how long your savings may last in retirement, helping you understand if you need to adjust your goals or savings habits.

REVIEW YOUR INVESTMENT PORTFOLIO

When you are in your 50s and nearing retirement, ensuring that your investment portfolio maintains a suitable balance between risk and reward is important. The right level of investment risk depends on how you intend to fund your retirement and how far away your target retirement date is.

For those planning to buy an annuity in a few years, moving your pension fund from stocks to lower-risk assets such as cash may be wise. This strategy helps protect your pension pot from potential stock market crashes just before you need it.

MAINTAIN GROWTH POTENTIAL WITH DIVERSIFIED ASSETS

If you plan to fund your retirement through income drawdown or other savings and investments, moving into cash too early could mean your money does not last as long as required. Retaining some exposure to stocks allows your portfolio the opportunity for long- term growth. Considering that your retirement could span several decades, inflation will inevitably erode the real value of your savings and reduce your purchasing power.

One way to mitigate the impact of rising prices is to remain invested in the stock market. Historical data shows that the stock market generally outperforms cash over long periods and exceeds the inflation rate. Diversifying your investments across various asset classes can help your portfolio withstand stock market fluctuations.

FOCUS ON YOUR PENSION

Pensions are an exceptionally efficient method of saving for retirement, particularly when you’re in your 50s. This is largely due to the tax relief you receive on personal pension contributions. For instance, a £1,000 pension contribution costs just £800 if you’re a basic rate taxpayer, £600 if you’re a higher rate taxpayer or £550 if you’re an additional rate taxpayer. Tax relief is essentially free money from the government, significantly enhancing your retirement savings.

Most individuals can contribute up to 100% of their UK relevant earnings or £60,000, or £3,600 if there are no relevant earnings (whichever is lower) into pensions yearly while still benefiting from tax relief until age 75. However, it is important to remember that your pension annual allowance could be lower if you have a very high income or have triggered the MPAA.

MAXIMISING UNUSED ALLOWANCES

If you wish to save more than your annual allowance, it might be possible to maximise unused allowances from the previous three tax years under carry-forward rules. This strategy can considerably enhance your retirement savings by utilising every available tax benefit.

MAKE THE MOST OF YOUR TAX ALLOWANCES

There are numerous other tax allowances investors can utilise. For instance, you can invest up to £20,000 (tax year 2024/25) into Individual Savings Accounts (ISAs) to benefit from tax- efficient income and growth.

You can withdraw money from ISAs whenever you desire without incurring any tax; this makes ISAs a useful source of income for those retiring before age 55 (the current earliest age at which you can access your pension subject to health and certain occupations). Additionally, ISAs form an integral part of a tax-efficient retirement income portfolio.

OTHER ALLOWANCES TO CONSIDER

Other allowances include the personal savings allowance, dividend allowance and Capital Gains Tax exemption. You can earn up to £1,000 a year in interest without paying tax if you’re a basic rate taxpayer. If you are a higher rate taxpayer, you can earn £500 a year without paying taxes. Additional rate taxpayers don’t receive any allowance at all.

The annual Capital Gains Tax-exempt amount from 6 April 2024 is £3,000. If the total of all gains and losses in the tax year fall within this exempt amount, no tax will be payable. Gains above the annual exemption will be taxable.

The exempt amount cannot be carried back or forward. The unused amount is lost if it’s not used, in part or full.

 TIME TO OPTIMISE YOUR PENSION AND MAKE THE MOST OF AVAILABLE TAX ALLOWANCES?

Please contact us for more detailed advice on optimising your pension and making the most of available tax allowances. We are ready to help you navigate the complexities of retirement planning and ensure you achieve a financially secure and comfortable retirement.

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.

A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).

THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE TAX PLANNING.

CONTRIBUTING ADDITIONAL AMOUNTS TO YOUR PENSION STANDS TO BENEFIT
YOU SIGNIFICANTLY IN THE LONG TERM

Recent research findings have brought to light a striking observation: fewer than
10% of adults in the UK contribute occasional lump sums to their pensions. This statistic
is particularly surprising given that such contributions could significantly amplify one’s
retirement savings.

Analysis reveals that even modest lumpsum investments can significantly increase the overall size of one’s pension pot due to the power of compound growth over time. For example, starting with an annual salary of £25,000 and contributing the auto-enrolment minimum (5% from the employee and 3% from the employer) from age 22 could lead to a retirement fund of around £434,000 by 66.

Yet, by adding nine lump sum payments of £500 every five years from age 25 to 65, one could enhance one’s retirement savings by an additional £11,000. Those capable of making heftier contributions, such as £5,000 every five years, could see their pension pot grow to £549,000, which is £115,000 more than without any lump sum additions, not accounting for inflation.

VALUE OF FORWARD-THINKING FINANCIAL DECISIONS

Encountering unexpected financial windfalls, whether through bonuses, gifts or other means, often tempts immediate expenditure. Currently, many are directing these extra funds towards managing monthly expenses. However, those who are financially able to contribute additional amounts to their pension stand to benefit significantly in the long term.

Pensions offer tax efficiency and the potential to outpace both inflation and interest rates on savings accounts, making them a wise choice for securing one’s financial future. With the end of the fiscal year having passed, and with it the expectation of annual bonuses for many, allocating a portion of this windfall towards a pension could substantially impact one’s retirement lifestyle.

ROLE OF EMPLOYERS AND PROVIDERS IN FUTURE PLANNING

Employers and pension providers play a crucial role in educating individuals about the importance of long-term financial planning. It is essential to illustrate how pensions fit within a broader financial context, ensuring individuals perceive retirement savings as a key component of their overall financial strategy. These efforts can empower individuals with the knowledge and resources needed to make informed decisions about their financial future, fostering a proactive engagement and planning culture.

WANT TO ENHANCE YOUR FINANCIAL SECURITY AND PREPARE FOR A COMFORTABLE RETIREMENT?

If you seek further insights into maximising your retirement savings through lump sum contributions or require personalised financial planning advice and wish to explore how to enhance your financial security and prepare for a comfortable retirement, please get in touch with us. Let us help you navigate your path towards a financially secure and fulfilling retirement.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).

THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.

Source data:

1. Boxclever conducted research for Standard Life among 6,350 UK adults. Fieldwork was conducted 26 July–9 August 2023. Data was weighted post-fieldwork to ensure the data remained nationally representative on key demographics.
2. Calculations assume the following: Starting salary £25,000 – Employer contributions 3.00% – Employee contributions 5.00% – Investment growth 5.00% – Salary growth 3.50% – Annual investment costs 1.00%