Expert Pension Advice Service in Tunbridge Wells.
A personal approach to Pensions & Retirement Planning.
Our Pension Advice service is there for every stage of life. From pension savings and regular reviews to drawdown, annuities and tax advice, talk to your local experts in Tunbridge Wells. We advise clients across Kent, East Sussex and the UK.
Expert Pension Advice Service in Tunbridge Wells.
We are Independent Financial Advisors (IFA) based in Tunbridge Wells, offering a broad range of Pension, Investment and Mortgage services to help you understand your finances during work and meet your financial goals upon retirement. Speak to one of our IFAs in Tunbridge Wells for advice on:
Retirement Planning
To have a comfortable, secure and enjoyable retirement, you need to build a financial cushion that will fund it all. The fun bit is enjoying your retirement; the important bit is planning how you’ll get there. Our IFAs will work with you to build your personalised retirement plan.
Pension Reviews
It's important to keep your pensions under review and ensure they are working their hardest for you. Our IFAs can help you understand what pensions you have, what benefits they include and what they're worth, and advise on the changes necessary for you to achieve your retirement goals.
Pension Consolidation
It is very common to want to combine several pensions into one to make them easier to manage. However, some pensions include valuable benefits and guarantees that can be lost on transfer. Speak with one of our IFAs for independent and unbiased pensions advice.
Retirement Planning Advice in Tunbridge Wells
Planning for retirement is an important process everyone should engage in throughout their working lives. Making wise decisions about your nest egg is an evolving process which should be revisited regularly and it starts with thinking about your retirement goals and how long you have to meet them.
The final stage is the fun bit – spending the money you’ve taken all those years to save. But even that requires careful planning as thought must be given to tax, making sure you don’t run out of money, and thinking about how much you might want to leave to your loved ones when you die.
Our expert pension advisors can help you plan for the life you want.
Four simple steps to planning your retirement.
1. Understand your time horizon
Your current age and expected retirement age create the initial groundwork of an effective retirement plan. This will tell you how long you have to build your pension ‘pot’. Your pot will grow depending on two key factors:
How much you pay in; and
How well the pension investments perform.
How much you pay for your pensions (the costs and charges) is also an important factor, but ultimately, the two elements above will have the greatest impact on whether you achieve your retirement goals.
How much you pay in
If you are employed, you will likely have been auto-enrolled into a workplace pension. There are legal minimum contribution levels for this type of pension, but the minimum is simply not enough for most people to live on in retirement.
If you can afford it, you should be contributing more.
The starting point is to put in is as much as possible, as early as possible. There is a very rough rule of thumb for what to contribute for a comfortable retirement:
Take the age you start your pension and halve it and turn that into a percentage – for example, if you start your pension at age 30, you will have 15%.
Then put this percentage of your gross (pre-tax) salary into your pension each year until you retire – for example, if you earn £25,000, you will pay 15%, which is £3,750 a year (£312.50 per month) into your pension.
This may seem like a large commitment, but if your employer already contributes say 5%, you will only need to contribute the remainder, which in this example is 10%.
How well the pension investments perform
Pensions are not like the savings you have in the bank. Pensions are a type of investment ‘wrapper’, in that the pension is the account and within that account, your money is invested, normally into funds. The benefit of the pension wrapper is that it offers significant tax advantages over other types of investments, the main one being the tax relief you receive on anything you pay into it. Tax relief is like a bonus from the government and how much you receive will depend on how much you earn and how much you pay into your pension.
The longer the time there is between today and retirement, the greater the level of risk you can afford to take with your pension investments. The reason we take risks when investing our money is that theoretically, the greater the risk the greater the potential there is to make money. But of course, the reverse is also true, the greater the risk the greater the potential there is to lose money. In reality, most people will strike a balance with the level of risk they take.
Ultimately, you need investment returns that outpace inflation so you can maintain your purchasing power during retirement. Investing little and often from an early age may offer extraordinary results through the power of compounding. You might not think saving a few pounds here and there in your 20s or 30s means much, but the power of compounding will make it worth much more by the time you need it.
Working with a Financial Advisor is a good way to establish exactly what you can afford to pay into a pension and the level of risk you are comfortable with. Your Financial Advisor will build your initial retirement plan with these two elements at its core.
2. Determine your retirement spending
The further you are away from retirement the harder it is to envision how much you will need to live on when you get there. Many people overestimate how much they’ll need as they often think what they need will be the equivalent of their current salary or earnings.
When you think about how much you will need, consider that by then you will have paid off your mortgage, you will (hopefully) no longer be funding your children, and other costs like commuting will not be a factor. However, on the flip-side, you may want to spend more time on your hobbies, seeing your grandchildren or travelling which may well increase your spending.
Having realistic expectations about post-retirement spending habits will help you determine how much you ultimately need in your pension pot.
How long you might live for also needs to be considered when planning for retirement, so you don’t outlive your savings. Though none of us has a crystal ball, we can look to our parents and grandparents for an idea of how long we may live for, and use the ONS life expectancy calculator as a useful guide.
3. Assess what you already have
Most of us will change jobs multiple times throughout our working lives, with different research suggesting this could be anywhere between 6 and 12 times. Every time you do so you are likely to acquire an additional pension pot.
It’s important to work out what pensions you have and how much they’re worth, and additionally if they offer any special benefits such as enhancements or guarantees.
There are two main types of pensions but within each of these, there are multiple variations which may have different features and benefits associated with them.
Defined Contribution (DC) pensions – these include personal pensions, self-invested personal pensions (SIPPs) and many modern workplace pensions such as group personal pensions (GPPs) and Master Trusts (a type of workplace pension that can be used by multiple unrelated employers). These are pensions where the amount you might receive when you retire depends on factors including the amount you pay in, the investment performance and the choices you make at retirement.
Defined Benefits (DB) pensions – these include final salary pensions and public sector pensions (including for Teachers, NHS workers, police, firefighters, the armed forces and many other public sector workers). These are pensions where the amount you receive when you retire is guaranteed and is based on how many years you’ve worked for your employer and the salary you’ve earned.
Most adults in the UK will also receive a State Pension if you meet certain criteria. You’ll be able to claim the new State Pension if you’re:
A man born on or after 6 April 1951.
A woman born on or after 6 April 1953.
The earliest you can get the new State Pension is when you reach State Pension age.
If you reached State Pension age before 6 April 2016, you’ll get the State Pension under the old rules instead.
You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension and 35 years will enable you to claim the full amount.
You can get a State Pension forecast to find out how much you could get and when.
Other assets
It’s not only pensions that can be used to fund your retirement: savings, other investments like stocks and shares ISAs and general investment accounts, buy-to-let properties, and your main home can all be used.
Increasingly, many people are turning to the money tied up in their homes to support their retirement lifestyle, by either downsizing or using lifetime mortgages as a way of releasing equity from their home.
Understanding and reviewing what you have is an important part of your retirement planning. It's important to keep your pensions and other assets under review to ensure they are working their hardest for you.
4. Cash flow your future
Working with a Financial Advisor allows you to take a more sophisticated approach within your retirement planning by using forecasting tools such as cash flow modelling.
A cash flow model is a detailed picture of your net assets, investments, income and expenditure, which are projected forward, year-by-year, using assumed rates of growth, income, inflation, wage rises and interest rates.
Cash flow modelling enables you to address financial objectives and areas of concern, including:
What is required to achieve financial objectives?
How to legally minimise tax liabilities.
How to balance cash in and out.
How to attempt to avoid running out of money.
How to plan the transfer of capital to other family members or charities.
How to support a defined lifestyle in retirement.
How seemingly minor changes and ‘stress-testing’ may dramatically impact defined financial goals.
And by modelling a range of different ‘what if’ cash flow scenarios and outcomes, it can help you to visualise and understand your financial future.
The Bottom Line
One of the most challenging aspects of creating a comprehensive retirement plan is striking a balance between making affordable long term regular contributions, having realistic investment return expectations, and your desired standard of living in retirement.
Creating the plan, sticking to it, and regularly reviewing it are all key to achieving your goals. Our Independent Financial Advisors (IFA) help people achieve their financial goals. The main reason people seek financial advice is that they do not know how to do this themselves. Sometimes, even experienced investors will seek help from IFAs, because they simply do not have the time to make the necessary decisions and act upon them themselves.
Your IFA will help you turn thought into action: “Action is the foundational key to all success” - Pablo Picasso.
Pension Review Service in Tunbridge Wells
We believe reviewing your pension once a year is a good start to make sure your retirement plans are on track. It’s easy to forget about your pensions, especially if your retirement is a long way off. But staying on top of what you’ve got and what they’re worth is important if you want to maximise your chances of a comfortable retirement.
When reviewing your pensions for the first time, we start by finding out what you have. Most pension providers will send you an annual pension statement which will contain much of the information required. If you’re not sure where to find old pensions, don’t worry, you can use the government’s pension tracing service to track them down.
What’s included in a Pension Review?
What are your pensions worth? We can find out the value (and all other relevant details) by contacting the pension provider on your behalf. Annual statements will only show what it was worth on the day the statement was produced and, as most pension values change every day it’s important to try to obtain an up to date valuation.
How much are you paying in? It’s important to understand how much you’re paying in and, if relevant, how much your employer pays in. You might find you’re contributing more or less than you thought.
Some employers will offer a ‘matching’ facility, which means the more you pay into your pension the more they will pay in. If you’re not sure ask your employer if this is something they offer.
Some pension providers allow you to automatically increase your pension contributions each year in line with inflation or by a fixed rate. This can be a great way of paying a bit more each year without really noticing it.
There are limits on how much you can legally pay into a pension each year without suffering any tax penalties. These limits will depend on how much you earn, what you and your employer are already contributing, and the Annual Allowance. If you can afford to pay up to the maximum it will ensure you are getting the most out of the tax relief available.
Our pension experts will help you understand what your pension contributions are and whether you have scope to contribute more, and what the maximum allowed is for your personal circumstances.
How have your investments performed? There are several questions we ask when looking at the investments within your pension, including:
How well have they performed?
Is this better or worse than expected?
How does it compare with its benchmark and other funds within the sector?
How much risk is being taken with these investments (is this higher or lower than you feel comfortable with)?
What are the charges for these investments?
What other investment options are available?
Do the fund managers take account of ethical, social and corporate governance factors?
Our Financial Advisors are pension and investment experts and can help you understand what you have and what other options are available to you.
Are you on track for the retirement you want? We use sophisticated income calculators and cash flow modelling to give you an estimate of the income you'll get when you retire.
Arrange your free consultation with a Pensions Advice expert.
Just fill out the form and we will be in touch shortly. Alternatively, call 01892 612 500 to contact us during office hours.
Choose AV Trinity for:
Pension Advice experts.
Clients across Kent, East Sussex & UK.
Free consultation.
Independent & unbiased financial advice.
Pensions and investments from the whole of the market.
A simple, secure process.
Friendly & experienced advisers.
Excellent value for money.
Pensions Advice Service FAQs
Useful Pension Advice Links
Find lost pensions using the government’s pension tracing service.
The Money and Pensions Service offers free impartial help with pensions, including the State Pension.
You can book an appointment with the government’s Pension Wise service if you’re over age 50 and need help with a defined contribution pension.
Check your State Pension age on the government website.
Find out how much your State Pension is worth in the future.
The FCA offers guidance on what to ask your Financial Advisor.
Use the Money Advice Service pension calculator to give you an estimate of the income you'll get when you retire.
What are the Pension Freedoms?
Pension Freedoms were introduced in 2015 to enable people with defined contribution pensions more choice and freedom over how they access their pensions, including options for taking all your money out in one go. It does not apply to defined benefits pensions.
Pension Freedoms introduced the options of Flexi-Access Drawdown (FAD) and Uncrystallised Funds Pension Lump Sum (UFPLS).
What is a Pension Annuity?
A pension annuity is a way of taking money out of your defined contribution pension. The value in your pension - the pension pot - is used to buy an annuity which pays you an income for the rest of your life. You don’t have to buy the annuity from the pension provider where your pension pot currently is, you can buy your annuity on the ‘open market’. The reason for doing this is to try and get the best deal (that is, the highest income you can) in exchange for your pension pot.
The benefit of an annuity is that it will pay you a guaranteed income until you die and depending on what options you have included, it may also pay out to your loved ones after you die.
The downside of an annuity is that once you have bought it, you cannot get access to your pension pot again.
What is Pension Drawdown?
Pension drawdown allows you to take a tax-free lump sum from your defined contribution pension and reinvest the remainder to provide either a regular income and/or ad-hoc lump sums now or in the future. Types of drawdown include capped drawdown, flexi-access drawdown (FAD) and short-term annuities.
Pension drawdown allows a very high degree of flexibility about the way you withdraw money from your pension.
It’s important to note that after the tax-free lump sum has been taken from a pension (normally 25% of the total pension pot) most money taken from a pension is taxable. Taking a large amount in one year could result in you paying much more in tax than you expected.
What is an Uncrystallised Funds Pension Lump Sum (UFPLS)?
UFPLS allows you to withdraw some or all of your pension pot as a lump-sum. The lump-sum is made up of a 25% tax-free amount, with the balance taxed as pension income.
The difference between pension drawdown and UFPLS may not be obvious, but essentially, with the drawdown option you could take one amount completely made up of the tax-free lump sum (until you have used up the tax-free lump sum allowance); whereas with UFPLS, the amount you take will normally always be made up of a 25% tax-free element and a 75% taxable element.
How much does pension advice cost?
A Financial Advisor’s fees vary depending on the advice you need and the complexity of your circumstances.
IFAs can charge their fees in different ways - the two main types are shown below, but you may find some IFAs offer a choice or combination of the two:
Fees based on a percentage of the value of your assets or pensions/investments. This can often range from 0.5% to 3%. So, if your pensions are worth £300,000 and your IFA charges you 1.5%, this would equate to a fee of £4,500.
Fees based on a fixed amount, often linked to an hourly rate. For example, an IFA may charge £250 per hour. If the advice you need takes 15 hours to complete, this would equate to a fee of £3,750.
At AV Trinity, we charge only fixed fees based on a cost per hour. We will always let you know what our fees are at outset and, if we provide you with ongoing advice, we will confirm our ongoing fees every year.
Our fees are for our advice, not for implementing or selling products. We charge in this way to ensure there is no bias and thus we feel this protects our clients from receiving poor advice.
How to get pension advice?
The only way to receive personalised pension advice is through an authorised Financial Advisor or IFA.
An IFA is an Independent Financial Advisor. In the UK, an IFA is also referred to as a Financial Adviser or Financial Planner. To be an IFA in the UK, the IFA must be authorised by the Financial Conduct Authority (FCA) or be authorised by a company which itself is regulated by the FCA. To be authorised, the IFA must have achieved a minimum qualification level which is recognised by the FCA. It can take many years and a lot of hard work to become an IFA.
You can find authorised IFAs and authorised companies on the FCA’s Financial Services Register.
There are several ways to find a Financial Advisor and we have outlined the most popular methods here:
Ask for a referral
We are very fortunate (and grateful) that a large number of our clients have been with us for many years and they will often refer friends, family and colleagues to us who are seeking financial advice. So a good place to start would be to ask someone you know if they can recommend a trust-worthy Financial Advisor.
We also regularly receive referrals from solicitors and accountants - this is not for any financial benefit on either side, but rather that often the advice we give will require consultation with a client’s legal or other professional representatives. So, if you already have a solicitor or accountant that you use and trust, consider asking them.
Search online
If you know exactly what type of IFA you are looking for then searching online may be the quickest way to locate a firm local to you.
Top 5 reasons for choosing AV Trinity
We are a Chartered Financial Planning firm, demonstrating we are at the height of our profession.
We are fully independent and will act solely in our clients’ best interests.
We advise on most areas of financial planning including pensions, investments, mortgages, protection, equity release, inheritance tax planning, trusts and long term care.
We are flexible in our engagement with clients, offering meetings at our Tunbridge Wells office as well as telephone and video meetings, alongside secure messaging and access to an online portal.
We are transparent at all times – you pay only for our advice and you will always know the £ cost upfront (we do not charge contingently).
Is pension advice tax deductible?
If you are paying for pension advice yourself for advice you have personally received, you will likely pay this out of taxed income. Generally speaking, no reliefs are available.
However, where pensions advice is provided by an employer to its employees the rules are more complex.
If an employer is funding general pensions advice for its employees (for example, a presentation to which all employees are invited to attend) this is unlikely to give rise to an employee benefit tax charge. However, where an employer pays fees to an IFA for one-to-one advice sessions, as a general principle a tax charge will arise on the cost of the advice as this represents an employment-related benefit (benefit in kind).
Since April 2017 a new Income Tax exemption has been available to cover the first £500 worth of relevant pensions advice provided to an employee on a one-to-one basis. The exemption applies to employees, former employees or prospective employees.
The exemption applies to the provision of information or advice in connection with the employee’s pension arrangements or the use of their pension funds. It can include advice on general financial and tax issues relating to pension arrangements or pension funds.
The exemption applies to the first £500 of advice in a tax year only.
If an individual has more than one employment and each employer provides pension advice in the relevant tax year the exemption can apply to each employment.
Where to get free pension advice?
There are several government-sponsored bodies which exist to help people with their pensions and they can be a great place to start if you want to know more about your pensions and the options available to you generally.
These services are free, but it’s important to understand that they offer information and guidance on pensions - they do not provide personalised financial advice.
The Money and Pensions Service offers free impartial help with pensions, including the State Pension.
You can book an appointment with the government’s Pension Wise service if you’re over age 50 and need help with a defined contribution pension.
Relevant Articles
Understand how much income you’ll need in retirement, the pension pot required, and how tax affects the outcome - with a simple calculator to test your plans.