Business & Professional Business
Money Matters: 10 10 Years of Belper IFS: Our First Decade Decisions, Decisions
10 years ago, Independent Financial 10 years ago, “To be, or notBelper to be?”, as the famous Bard once Solutions was founder (me,or Solutions was formed after its said. Or as pending retirees say “annuities Kevin Glover) from Kevin Glover) was made redundant The flexi-drawdown?” Well, maybe not quite.The Derbyshire Building Building Society. Derbyshire For those about to retire with monies invested in personal
Since then, Belper has Derbyshire, pensions or Belper company defined contribution schemes (not final Since then, seen the loss of The Derbyshire, Woolworths, Somerfield, Thomas Cook salary schemes), the question is how to drawand theirBritannia pension Woolworths, Somerfield, Thomas Cook and Britannia Building Society to to name name but but aa few few long-standing benefits.Society Building long-standing institutions that that are are now now confined confined to institutions to history. history. Pre-2015, most the annuity Generations of would peopleconsider have been been served or Generations of people have servedroute, or been been especially asof thethese pension provider today stillare sends their annual customers organisations. You probably customers of these organisations. You are probably statement detailing the current balance of the fund but and also one. State State Pension Pension Age Age has has changed changed several times one. several times and explaining and projecting your At future benefits in the form of so again. again. least interest rates have will most likely likely do so will most do At least interest rates have an annuity. So, it could seem the obvious pathway to take not changed much! Rubbish then and not much better not much! Rubbish and not much better yourchanged retirement benefits with anthen annuity. today. today.
Since April 2015, the pension rules surrounding access to your
Consider thischanged. joiningThere the EU EU was considered the pension have is no longer a compulsion to Consider this –– joining the was considered the right right decision once upon upon time. the options. buy an annuity. Let’s consider decision once aa time.
From my dining room in 2009, to an office Heanor, Annuities a guaranteed income thein lifetime of the From my provide dining room in 2009, to an for office in Heanor, back to Belper to athe present annuity location, much annuitant (unlessand younow choose temporary which is back to Belper and now to the present location, much actually a typeincluding of drawdown!). This means is a known has changed the greyness of mythere hair and the has changed including the greyness of my hair and the levelof of my income that, noNow matter longofyou livehave for (even size waistline! ashow a team 8 we seen size of my waistline! asthe acontinue team 8 be wepaid. haveSome seen if aged 120!), youexpand knowNow itover would the client base years.ofto ‘Generous’ the client base expand over the years. ‘Generous’ people love the certainty and indeed, if risk-averse in nature, successive Chancellors introduce new legislation successive Chancellors the assurance means don’t have new to worry about impacting the publicyou andintroduce signposting thelegislation need forthe income ceasing beforeand yousignposting draw your last Budgeting impacting the public thebreath. need for financial advice. can be easier too. Annuity options include bolting on extra financial advice. benefits for spouses or guarantees should the annuitant die your lives over What about you – whattypes has changed prematurely. Alternative of incomein are available inannuity your lives over What about you – How what many has changed the last 10 years? jobs have you had? Has suchlast as those that pay an inflation-matching payment too, the 10 years? How many jobs have you had? Has your family extended or tragedy Howofmany however all of these options reducestruck? the amount income your family extended or tragedy struck? How many times have you moved house? How many pension paid to the annuitant. Effectively buying extra features has a times havehave youyou moved Howofmany pension schemes beenhouse? a member and simply left, cost implication. schemes havereason you been a member of and simply through one or another? How many cars,left, through or events another? How many cars,and Male agedone 65. reason Non-smoker with no health impairments partners and other life have occurred? partners and other life events have occurred? with a £100,000 fund using the entire fund to buy an annuity: Level lifetime annuity with 20have years’you guarantee PA How many investments made £5,715 and when Escalating lifetime annuity (RPI) with 20 years’ £3,197 How many investments have you made andpoint when were they last reviewed and looked at? guarantee My is were they last reviewed and looked at? My point is
PA However, once committed to buying an annuity, there is
that theneed needfor foraccelerate financialadvice advice and solution should no opportunity to or cashand in any unpaid benefits, that the financial aasolution should should change;products say you wish tosolutions draw one-off. Financial Financial products andsolutions notbe bepersonal seenas asacircumstances aone-off. and not seen more the funds out.atat Once in, youbut arejust in! wereof probably right thetime, time, but justhow howmuch muchhas has were probably right the changed changedsince sincetheir theirinception? inception? Alternatively (and increasingly popular) is flexi-drawdown.
Drawdown has other benefits but additional risks.wrappers Drawdown Investment (whether held ininpension oror Investmentfunds funds (whether held pension wrappers means that your pension fund remains invested (hopefully alternative structures such as Stocks and Shares ISAs), alternative structures such as Stocks and Shares to grow over the longer term, but reminding you yourISAs), are are also aremostly mostlyrun runby byfund fund managers who are alsohuman human investments rise and fall inmanagers value and who are not guaranteed), beings. humans may retire, toto other beings. As humans theythe may retire, defect other but at theAs same time they with option todefect draw an income companies, or out companies, orrun run outofofluck! luck! Solutions Solutionsthat thatmay mayhave have from the invested fund. been beenright rightatatthe thestart startmay mayno nolonger longerbe besuitable suitableoror effective. Leading fund managers inin2009 may Much caution is needed Drawdown is undeniably effective. Leading fundhere. managers 2009 mayno nolonger longer be fund we approach 2020. more flexible thanmanagers an annuity.asasIts strength could be its beleading leading fund managers we approach 2020. weakness. The income is not guaranteed for life. It is possible
the pension fund is exhausted way before the end of your They will In 2015, pension regulations changed. They will InApril April 2015, pension regulations changed. life. Much care and thought has toPensions be givenfrom over whether almost certainly change again. prior totothe almost certainly change again. Pensions from prior income needs to be sustainable for life –and if not. Whatwould would this time may no longer be suitable but just how thisthe time may no longer be suitable –annuities, but just how would be consequence if it ran out? Unlike there are you know? So, as you sit munching your turkey over the you know? So, as you sit munching your turkey over the options to increase or decrease income depending upon your festive period, consider how many of these questions festive Utopia period,isconsider how many of these questions needs. a rising income that is sustained for your apply you and may benefit from having a applyto tobut you andsee seewhat whatsuch may from lifetime unknowns exist asbenefit how long you having will livea review. and what are the actual investment returns amongst other review. factors.
IsIs2020 2020the thetime timeto totake takeaalook lookatatyour yourfinancial financial arrangements once get them So, take your time andagain lookand at the options. arrangements once again and get themfitSchemes fitfor for do purpose? encourage purpose? the benefit of shopping around for solutions at retirement. Remember the decisions you take could be
binding soyou seek independent financial advice before you10 Wishing a happy 2020 and a prosperous next Wishing you a happy 2020 and a prosperous next 10 commit. years. years.
By Kevin Glover, Belper IFS By Kevin Glover, Belper IFS By Kevin Glover, Belper IFS This information is general only and is not intended to Thisinformation information is general notdata intended requirements. abovetoshould address your particular This is general onlyonly andand is notisThe intended to requirements. The data address yourparticular particular not be relied upon in its entirety andThe shall not be above deemed address your requirements. data above shouldshould not notbe beorrelied upon in its entirety not betodeemed be relied upon in its entirety and shalland notshall beordeemed be or to constitute advice. No individual company should to be or constitute Noorindividual or company should constitute advice. Noadvice. individual company should act upon such act upon such information without receiving appropriate information without receiving appropriate professional act upon such information without examination receiving appropriate professional advice after a thorough ofadvice their after aprofessional thoroughsituation. examination of their particular situation. of their advice after a thorough examination particular particular situation.
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