In the press

Skandia pensions specialist Adrian Walker talks about one simple way to offset the reduction of drawdown rates.

On 6 April 2012 the lifetime allowance (LTA) for pensions is due to decrease from £1.8m to £1.5m. People aged 55 or over with pension savings that could reach £1.5m have the opportunity to maximise their available LTA provided they take action prior to 6 April 2012.

People who are eligible for flexible income drawdown on their pension savings can use the scheme to significantly reduce their inheritance tax liabilities, according to investment specialist Skandia.

Skandia pensions specialist Adrian Walker talks about why advisers should identify any individuals where the need to register for fixed protection could be a key part of retirement planning.

The latest 15 year gilt yield has fallen to a new record low of 2.25%, which will lead to a lower income for people retiring today, whether it be via a smaller annuity income or a lower maximum income level in income drawdown.

People may not realise, but when they reach age 75, the retirement options they are using, or are expecting to use, may no longer be available to them. Instead, they may find they are stuck in outdated and inflexible pension contracts. People should take action to review their existing pension arrangements now, before they reach age 75, to help ensure they understand whether the options available to them will meet their longer term requirements.

On Monday 28 November, HMRC announced some changes to the carry forward rules governing pension funding. The changes enable people to carry forward unused allowances that were previously deemed unavailable and hence, can now pay more into their pension and benefit from further tax relief. This extra funding capability is great news, but is only available until the end of the current tax year, into pension arrangements with an input period ending in the 2011/12 tax year. Some people may not realise that they can still make use of this opportunity even if their pension input period in the current tax year has ended.

The latest 15 year Gilt Yield figure, which will drive the maximum level of income withdrawal someone can take from their pension from December, has hit a new record low. The yield has fallen 37% since the start of the tax year, financially squeezing those about to take an income from their pension savings, and those approaching their pension income review period.

Statistics revealed by Skandia shows that over half of their pension customers in income drawdown are not actually taking any income*. This could be a missed opportunity for many.

Independent financial advisers believe a massive 70%* of their customers currently have a pension funding gap, according to new research conducted by Skandia, the investment platform. This is where customers have not saved enough money to reach their desired level of income in retirement. Advisers believe customers would need to pay on average 56% more to their current pension contribution to fund this pension gap.

The latest 15 year Gilt Yield figure, released on 14th October, shows that following the Government’s latest round of quantitative easing, Gilt Yields remain at historically low levels. People entering into income withdrawal today could expect a fall of up to a quarter of their annual income compared to just six months ago.

Anyone with a pension pot of around £200,000 or more needs to urgently review their retirement plans to assess whether they are in danger of exceeding the lifetime allowance which is due to reduce from £1.8 million to £1.5 million in April next year.

Political debate continues with regard to the 50% income tax rate payable on taxable income in excess of £150,000 in terms of how long it may stay in place.

Skandia financial planning specialist Phil Carroll talks about how the 50% income tax rate has been good for government coffers but that advisors must consider issues of tax policy and developments within this field when planning for clients.

Skandia pensions specialist Adrian Walker comments on how new pension rule changes could prompt increased interest in income drawdown.

Skandia financial planning specialist Phil Carroll talks about how maximum investment plans can be used for tax efficiency purposes.

Skandia pensions specialist Adrian Walker comments on how the Income tax and NI merger could end higher-rate relief.

Skandia pensions specialist Adrian Walker comments on how the Pension reform threatens protected tax free cash.

Skandia Financial Planning Specialist Phil Carroll comments on how workplace pensions schemes and drawdown contracts may escape the European Court of Justice (ECJ) gender ruling.

Skandia pensions specialist Adrian Walker comments on the call for simplification of income drawdown rules.

Adrian Walker discusses how the Government must redress the growing gap between private and public pensions sooner rather than later

Skandia pensions specialist Adrian Walker comments on currents rules surrounding the administration burden of income drawdown arrangements.

Adrian Walker discusses the confusion over annuities after HMRC drawdown change.

Adrian Walker answers consumers' questions about pensions and tax

Adrian Walker discusses if the Government is right to tear up the previous administration’s proposed restrictions to higher-rate tax relief in favour of a reduced annual allowance.

Adrian Walker on why the £50k annual pension contribution cap is overly restrictive.

Adrian Walker discusses how to protect clients’ pre-A-Day tax-free cash.

Adrian Walker discusses the benefits of income recycling.

Adrian Walker discusses why advisers should review the long-term benefits of recycling income to build a client’s retirement.