HSP Pension Planning

You may already have pension provision in place or you may need to start putting plans in place for the future. Whatever your needs are we can look at suitable solutions for immediate or future retirement planning.

Income provision in retirement can be uncertain, with state pension ages being extended and life expectancy increasing. The key to ensuring realistic pension planning is to understand your retirement objectives:

• How much do you want to put aside? (contribution planning)
• When do you want to retire?
• How much income you will need in retirement?
• How will your lifestyle change?

A starting point for all our clients is to understand their existing plans. We analyse all the options based on a full understanding of current circumstances and future objectives. These could include company pension scheme membership, a cost effective personal pension arrangement, or perhaps a Self-Invested Personal Pension (SIPP) or Small Self-Administered Scheme (SSAS) where you can have more control over the underlying assets and access to a wider range of investments such as commercial property.

You may have reached retirement age and therefore need to review all the options in respect of your retirement income needs whether this needs to be flexible of you prefer a fixed solution. We can provide advice on a range of income planning options. These could include lifetime annuities, flexible drawdown or fixed term annuities.

Types of Pension

There are 2 main types of pension, along with the State Pension from the government:

• Defined contribution – based on how much money has been paid into your pension
• Defined benefit (final salary or career average) – based on your salary and how long you have worked for your employer

Defined contribution (DC)

These are sometimes known as ‘money purchase’ pensions. They can be personal pensions arranged by you or workplace pensions arranged by your employer.

The money paid in by you or your employer is put into investments by your pension provider. The value of your pension can go up or down depending on your investments. The amount you get when you come to take your pension depends on how much was paid in and how well the investments have performed.

With defined contribution pensions, you decide how to take your benefits.

Types of defined contribution pension

These include:

• Executive pension plan
• Group personal pension
• Master trust pension (e.g. NEST, NOW pension, the People’s Pension)
• SIPP (Self Invested Personal Pension)
• SSAS (Small Self-Administered Schemes)
• Stakeholder pension/Personal Pension

Defined benefit (final salary or career average)

Defined benefit pensions are nearly always workplace pensions arranged by your employer. These are sometimes known as ‘final salary’ or ‘career average’ pensions. Your provider guarantees a certain amount each year when you retire.

How much you get depends on your salary, how long you’ve worked for your employer and a calculation made under the rules of your pension scheme.

The State Pension

The pension you get from the government is called the State Pension. You get it when you reach State Pension age.

You have to claim the State Pension. The amount of state pension you receive is based on the number of years national insurance contributions you make.