The year to cut costs

There are two essentials for retirement, plenty to live for and plenty to live on. Our offer is that if you concentrate on the first, we will do our best to help with the second, says IFA Graduate & Professional Financial Services.

In 2002/03, according to the Department for Work and Pensions, state benefits accounted for just over half of pensioners’ income. State benefits work on the basis that the contributions of those who are working pay the benefits of those who are retired so no great mathematical skill is required to see that the system must change – a change we have started to see with the rises in the state pension age.

Pensions continue to offer the most tax-efficient method of saving to provide an income in retirement with tax relief on contributions and the pension fund growing free of income and capital gains taxes (apart from tax on dividend income), but many savers were put off by layer upon layer of confusing pension regulation. However, 6th April 2006 saw the introduction of sweeping changes intended to result in many more people investing in a pension of their own.

We now have one set of rules applying to both new and old pension schemes. Instead of complex calculations we now have simple limits on the size of your fund and the amount of your contributions. And you can contribute to as many pension schemes as you wish – both occupational and private. You can take 25% tax-free cash from all pensions and you do not have to retire at the same time.

If you want to ensure you have plenty to live on and you are ready to look ahead, your choice now makes absolute sense:

• Stakeholder pensions are simple and low cost but with limited investment choice.

• Personal pensions have no cap on charges and offer a wider investment choice.

• Self Invested Personal Pension Plans (SIPPs) allow you to invest in a wider range of investments, giving extra flexibility and investment choice, including direct commercial property investment.

By combining our pension and investment expertise, we are in an excellent position to advise you on how to ensure a long, happy and, above all, prosperous retirement.

To find out more visit or contact Julian Howes, Principal, at or on +44 (0)12 8565 3300.