More Money In Retirement Matters
How we sort out our finances for retirement has always been a complicated business. With life-expectancies increasing it is something that everyone needs to pay more heed to.
Let’s start with draw downs. In your private pension schemes you are entitled on retirement to a percentage of your pension as a tax-free draw down. For this you actually buy into an annuity which secures your income for the coming years. Your pension company will probably offer this automatically, but it is always worth shopping around to make sure you have the best deal. It is the same with stairlifts as dealing with a company that can offer different options, you are more likely to get a good price.
But there are changes afoot too. Before the end of March this year, a draw down on £100,000 pension could guarantee an annual income of £5,800. If you agreed your draw down after this date, you are entitled to 20% more making the annual income almost £7,000.
According to pension expert John Lawson of Aviva this is meant to be a stop-gap and there are rumours that this draw down will be cut back to just 8% next April. We reckon it’s always worth getting the advice of a financial adviser.
Financial advisers Hargreaves and Lansdown give some guidelines about pensions here, including whether you can claim up to 40% more.
If you’re planning to live abroad once you start claiming your pension, you should check out the rules carefully. In some countries – more than 150 of them including Canada, Australia, New Zealand, South Africa, India and Pakistan – you don’t get the full pension or it doesn’t rise with inflation.
Some pensioners have been caught out by this trap already. Paul Lewis of Money Box on Radio 4 explains that if for instance you first drew your pension in 1993 at just over £56, you would still be getting that same amount now even though the state pension has gone up to more than £110 per week. Watch him on the video below.
The countries where your pension isn’t affected include the EU, the USA and other random countries that we have agreements with.
This point is about to be debated in Parliament alongside the new rulings they want to bring in for a one-tier pension. Due to all other austerity measures the situation is unlikely to change.
Pensioners‘ incomes in good shape
Meanwhile the Institute of Financial Studies has reported that pensioners’ incomes have risen over the last few years, whereas other income groups have seen a decrease. Yes apparently pensioners have seen higher rises than any other group over the last 30 years. However the report does not elevate pensioners to the state of ‘wealthy’ and in fact they are still likely to be ‘found in the poorer half of the UK population’.
The report from the BBC claimed “Official statistics recently ranked the UK as fourth out of 27 European countries in terms of risk of the over-65s ending up in poverty.”
On a lighter note
Let this story from Germany raise your spirits but make you cautious when consulting your financial advisor. Make sure they are bona fide and trustworthy – before taking ‘justice into your own hands’!
Watch the video below: Gang of pensioners kidnap financial advisor
We can assure you that no elderly mob of ex-customers has ever needed to kidnap the UK’s oldest stairlift advisor – Dr.Neil Stirling! He’s always had a warm welcome wherever he goes.
If you want the facts to make your money go further when buying a stairlift then contact us and you will get genuine and trustworthy advice – that only an ex-doctor can provide. Call us today on 0800 007 5050.