Choose the Right Edinburgh IFA for Pension Advice in Edinburgh & the Lothians
We all want a certain amount of security in our lives, especially when it comes to safeguarding our retirement income. That’s why it’s so important for you to get the best pension advice before making a final decision on how to take your pension benefits.
Torphin Financial Planning is a local IFA which specialises in providing pensions advice in Edinburgh and the Lothians.
There are two options when seeking retirement planning financial advice:
Independent Financial Advice (IFA)
This is where the adviser can research and select products from a wide range of providers, from the whole of market, to best suit the client.
This is where the financial adviser can only select the product for the clients from a narrow range of providers or only one provider. An example would be an adviser who is an employee of an Insurance Company or Bank offering only their own products.
Torphin are Independent Financial Advisers so our clients can choose from a wide range of investments and retirement products from many different providers.
Different Pension Choices
Employer Schemes are controlled by your employer and are likely to have limited choice. You would be provided with options as to how you wish to take the benefits. It is advisable that you seek Independent Financial Advice before making any decisions.
Deferred Employer Benefits – Defined Benefit Pensions or Final Salary Pensions
Deferred employer benefits are where you no longer work for that employer. If you are in a defined benefit pension or final salary pension, it is vital that you seek advice earlier than 12 months before the schemes Normal Retirement Age (NRA). If you leave it too late your choices may be restricted to remaining in that scheme which may not be in your best interest. This type of pension which can seem complex is explained in more detail in our section on Defined Benefit Pensions.
In the past, annuities were the main option to provide income: 25% of the fund is taken tax free at retirement, and 75% of the fund is handed over to an Insurance Company. Annuities are low risk and offer a guaranteed income which is level or increases until death.
However, an annuity is tied to interest rates which have been low over the last 10 years, making it hard to achieve the retirement income people need. They guarantee to pay the agreed income for life with a usual guarantee period of five to ten years. This is because when the individual dies the plan dies with them.
The guarantee period protects beneficiaries if the member dies early on in retirement so running the risk that the fund could be lost. The main annuitant’s income will only be paid to the spouse for the remaining term of the guarantee period.
New Pension Freedoms through Flexi Access Drawdowns
New pension freedoms mean that you have more flexibility as to how and when you draw down your pension. You no longer need to take all the benefits at one time. The 25% tax free cash can be taken in stages and the income later, depending on your personal situation. For example, you may want to clear a mortgage before retirement, move from full time work to part time work, or continue working after the Normal Retirement Age (NDA).
It all depends on your lifestyle and what you want to do. It’s important to seek out an Independent Financial Adviser well before retirement to discuss any Drawdown Options to ensure you make the right decisions at the right time in your life.
Choose the Right Pension Options for a Secure Retirement
The right pension option for you depends on whether you want a secure, steady income, or want a potentially higher income in return for less security. It’s important to seek out an Independent Financial Adviser who specialises in providing pension advice tailored to your needs.
Contact Torphin Financial Planning for a no-obligation meeting at our South Edinburgh office and let’s discuss your pension options.