Meal of raw vegetables (5

Money Matters: Money Matters:Money Matters:

Decisions, Decisions10 Years of Belper IFS: Our First10 Years of Belper IFS: Our FirstDecadeDecade

“To be, or not to be?”, as the famous Bard once 10 years ago, Belper Independent Financial 10 years ago, Belper Independent Financial said. Or as pending retirees say “annuities or Solutions was formed after its founder (me, Solutions was formed after its founder (me,

flexi-drawdown?” Well, maybe not quite. For those about to retire with monies invested in personal Kevin Glover) was made redundant from The Derbyshire Building Society. Kevin Glover) was made redundant from The Derbyshire Building Society. pensions or company defined contribution schemes (not final Since then, Belper has seen the loss of The Derbyshire, Since then, Belper has seen the loss of The Derbyshire, salary schemes), the question is how to draw their pension Woolworths, Somerfield, Thomas Cook and Britannia Woolworths, Somerfield, Thomas Cook and Britannia benefits.Building Society toBuilding Society to namename butbut a a fewfew long-standing long-standing Pre-2015, most would consider the annuity route, especially as the pension provider today still sends their annual statement detailing the current balance of the fund but also explaining and projecting your future benefits in the form of an annuity. So, it could seem the obvious pathway to take your retirement benefits with an annuity. institutions that are now confined to history. Generations of people have been served or been customers of these organisations. You are probably one. State Pension Age has changed several times and will most likely do so again. At least interest rates have not changed much! Rubbish then and not much better today. institutions that are now confined to history. Generations of people have been served or been customers of these organisations. You are probably one. State Pension Age has changed several times and will most likely do so again. At least interest rates have not changed much! Rubbish then and not much better today. Since April 2015, the pension rules surrounding access to your pension have changed. There is no longer a compulsion to buy an annuity. Let’s consider the options. Consider this – joining the EU was considered the right decision once upon a time. Consider this – joining the EU was considered the right decision once upon a time. Annuities provide a guaranteed income for the lifetime of the annuitant (unless you choose a temporary annuity which is actually a type of drawdown!). This means there is a known level of income that, no matter how long you live for (even if aged 120!), you know it would continue to be paid. Some people love the certainty and indeed, if risk-averse in nature, the assurance means you don’t have to worry about the income ceasing before you draw your last breath. Budgeting can be easier too. Annuity options include bolting on extra From my dining room in 2009, to an office in Heanor, back to Belper and now to the present location, much has changed including the greyness of my hair and the size of my waistline! Now as a team of 8 we have seen the client base expand over the years. ‘Generous ’ successive Chancellors introduce new legislation impacting the public and signposting the need for financial advice. From my dining room in 2009, to an office in Heanor, back to Belper and now to the present location, much has changed including the greyness of my hair and the size of my waistline! Now as a team of 8 we have seen the client base expand over the years. ‘Generous ’ successive Chancellors introduce new legislation impacting the public and signposting the need for financial advice. benefits for spouses or guarantees should the annuitant die prematurely. Alternative types of income annuity are available such as those that pay an inflation-matching payment too, however all of these options reduce the amount of income paid to the annuitant. Effectively buying extra features has a cost implication. What about you – what has changed in your lives over the last 10 years? How many jobs have you had? Has your family extended or tragedy struck? How many times have you moved house? How many pension schemes have you been a member of and simply left, through one reason or another? How many cars, What about you – what has changed in your lives over the last 10 years? How many jobs have you had? Has your family extended or tragedy struck? How many times have you moved house? How many pension schemes have you been a member of and simply left, Male aged 65. Non-smoker with no health impairments and partners and other life events have occurred?through one reason or another? How many cars, with a £100,000 fund using the entire fund to buy an annuity:partners and other life events have occurred? Level lifetime annuity with 20 years’ guarantee £5,715 PA How many investments have you made and when Escalating lifetime annuity (RPI) with 20 years’ guarantee £3,197 were they last reviewed and looked at? My point is How many investments have you made and when were they last reviewed and looked at? My point is

PA However, once committed to buying an annuity, there is no opportunity to accelerate or cash in any unpaid benefits, that the need for financial advice and a solution should that the need for financial advice and a solution should should personal circumstances change; say you wish to draw not be seen as a one-off. Financial products and solutions not be seen as a one-off. Financial products and solutions more of the funds out. Once in, you are in! were probably right at the time, but just how much has were probably right at the time, but just how much has Alternatively (and increasingly popular) is flexi-drawdown. changed since their inception?changed since their inception? Drawdown has other benefits but additional risks. Drawdown means that your pension fund remains invested (hopefully to grow over the longer term, but reminding you your investments rise and fall in value and are not guaranteed), but at the same time with the option to draw an income from the invested fund. Investment funds (whether held in pension wrappers or alternative structures such as Stocks and Shares ISAs), are mostly run by fund managers who are also human beings. As humans they may retire, defect to other companies, or run out of luck! Solutions that may have Investment funds (whether held in pension wrappers or alternative structures such as Stocks and Shares ISAs), are mostly run by fund managers who are also human beings. As humans they may retire, defect to other companies, or run out of luck! Solutions that may have been right at the start may no longer be suitable or been right at the start may no longer be suitable or Much caution is needed here. Drawdown is undeniably effective. Leading fund managers in 2009 may no longer effective. Leading fund managers in 2009 may no longer more flexible than an annuity. Its strength could be its be leading fund managers as we approach 2020. be leading fund managers as 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 life. Much care and thought has to be given over whether the income needs to be sustainable for life and if not. What would be the consequence if it ran out? Unlike annuities, there are options to increase or decrease income depending upon your needs. Utopia is a rising income that is sustained for your lifetime but unknowns exist such as how long you will live and what are the actual investment returns amongst other In April 2015, pension regulations changed. They will almost certainly change again. Pensions from prior to this time may no longer be suitable – but just how would you know? So, as you sit munching your turkey over the festive period, consider how many of these questions apply to you and see what may benefit from having a review. In April 2015, pension regulations changed. They will almost certainly change again. Pensions from prior to this time may no longer be suitable – but just how would you know? So, as you sit munching your turkey over the festive period, consider how many of these questions apply to you and see what may benefit from having a review. factors. So, take your time and look at the options. Schemes do encourage the benefit of shopping around for solutions at retirement. Remember the decisions you take could be Is 2020 the time to take a look at your financial arrangements once again and get them fit for purpose? Is 2020 the time to take a look at your financial arrangements once again and get them fit for purpose? binding so seek independent financial advice before you commit. Wishing you a happy 2020 and a prosperous next 10 years. Wishing you a happy 2020 and a prosperous next 10 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 This information is general only and is not intended to address your particular requirements. The data above should not address your particular requirements. The data above should not be relied upon in its entirety and shall not be deemed This information is general only and is not intended to address your particular requirements. The data above should be relied upon in its entirety and shall not be deemed to be or to be or constitute advice. No individual or company should not be relied upon in its entirety and shall not be deemed constitute advice. No individual or company should act upon such act upon such information without receiving appropriate to be or constitute advice. No individual or company should information without receiving appropriate professional advice after professional advice after a thorough examination of their act upon such information without receiving appropriate a thorough examination of their particular situation. particular situation. professional advice after a thorough examination of their particular situation.

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