Planning the right retirement for you.

Why might you be concerned?Maybe you are… Worried you cannot afford to retire.

Worried that your retired years will not be as you dreamed them.

Unsure which route to take and need help.

Concerned about all the legislation. It is all just so confusing.

Unsure how to put you other assets to best use.

Worried about your family if you died; would they be OK.

Worried about a change in your future circumstances; could you adjust.

Trying to make sure as much of you wealth as possible is passed to

your family.

So, what you would like to do is…..• Know how much is enough to retire when and how you want.

• Understand the ways you can use a pension to make an informed

choice.

• Know your family is provided for if the worst were to happen to

you.

• Ensure that you are using all your assets in the best way.

• Be able to respond if your circumstances change.And…..• Know that you have access to expert advice, where your interests are being

looked after and that you ultimately have control over your retirement.

What should you do? Start planning now.

Set out your plans for retirement. What are your goals and priorities?

You need to get advice and be sure not to overlook anything.

Put in place a retirement plan that suits you and your family.

Why Swindells? We are the experts.

We work with you in a relationship of trust.

We provide you with on-going support and guidance, helping you stick to the

plan.

We provide wholly impartial advice covering all your options.

Funding your pension savings. Pension contributions are limited on tax relief.

Personal contributions - lesser of £40,000 a year or 100% of your earnings.

Employer contributions - not linked to earnings.

Employer contributions - but the £40,000 a year limit does apply.

Wholly and exclusively test.

You can carry forward unused contribution allowance from 3 previous years.

Potential to pay £160,000 in one year.

Be careful once benefits are taken, £40,000 allowance reduces. And you

still need a salary!

Why contribute? What is the advantage? Higher rate tax payer £32,000 net (before tax relief) pension contribution “Grossed up” to £40,000 in your pension A further £8,000 comes off you income tax bill too!

And when you take pension income. Basic rate tax payer £40,000 of pension pot taken £10,000 tax free (as 25% tax free lump sum) £30,000 at 20% basic rate tax; £6,000 tax paid An effective income tax bill at 15%

Taking benefits. Where we are now…Method Lump Sum Income Death benefits Inheritance tax

treatment

Annuities 25% of the whole pension value

Balance of the pot spent with an insurance company

in exchange for a guaranteed income for life

What you buy from the insurer at a cost

e.g. guarantee period & spouses benefits

Pension removed from the estate as it has

been “spent”

Drawdown 25% of the whole pension value

Pot remains invested. You draw an income directly

from it within minimum and maximum limits

Pension pot passes to spouse to draw as a taxable lump sum or

income

Not part of the estate for IHT; but pension

rules mean lump sum taxed at 55%

Phased Drawdown

25% of the pension value that

is put into payment

Pot remains invested, but it is not all put into payment in

one go. Very tax efficient income as each “phase” of income has 25% paid tax

free

Pension pot passes to spouse to draw as a taxable lump sum or

income

If under age 75 lump sum from the part of

the pension not in payment can be paid free of tax. Otherwise

same as drawdown

What is changing? Income withdrawal. Buying an annuity remains.

Drawing an income directly from my pot remains.

Phasing in benefits remains.

So not a lot then….? Restrictions on annuity providers to be lifted.

Limits on income available from Drawdown to be removed; now to be called

“flexi access”.

Phasing income limits removed too.

And we have a new option - “Uncrystallised Funds Pension Lump Sum (UFPLS)”.

A look at annuities. Annuities could suit you.

But do they offer good

value?

Enhanced annuities can

greatly improve these low

rates.

Will product innovations

alter the perception of

annuities.

Time will tell.

Drawing down; how does it work?

For drawdown and phasing, think “sausages”!

But you do not have to take the income.

It can be turned on and off as you need to.

For UFPLS you must take the income bit.

Why phase my income? After all other income £30,000 net per annum required.

Basic rate tax payer.

No need for a large one off lump sum.

Pension fund value £500,000.

Why phase my income?Full Drawdown

Lump Sum £ 125,000.00 (not spent? 40%

IHT?)Gross Taxable

Income £ 37,500.00

Net Income £ 30,000.00

Tax £ 7,500.00

Fund Drawn p/a £ 37,500.00

Phased Drawdown

PCLS £ 8,825.00

Gross Taxable Income

£ 26,475.00

Net Income £ 21,180.00

Tax £ 5,295.00

Fund Drawn p/a £ 35,300.00

Death Benefits - what is changing? The current rules…

Age of deceasedBenefits in

payment or not?How death benefits

are paidWho benefits can be paid to

Tax treatment

Under age 75

Not in payment

As lump sum Any beneficiary No tax

As pension A dependent Marginal rate of tax

In payment

As lump sum Any beneficiary 55% tax

As penison A dependent Marginal rate of tax

Over age 75 All of the pension

As lump sum Any beneficiary 55% tax

As penison A dependent Marginal rate of tax

Death Benefits - what is changing? The new rules…

Age of deceasedBenefits in

payment or not?How death benefits

are paidWho benefits can be paid to

Tax treatment

Under age 75

Not in paymentAs lump sum

Any beneficiary

No tax

As pension

In payment

As lump sum

Any beneficiaryAs pension

Over age 75 All of the pensionAs lump sum

Any beneficiary

Marginal rate of tax

(from 2016)As pension

Using other assets to preserve the estate Preservation of the estate for your heirs benefit is a priority.

ISAs tax efficient from a growth point of view; but so are pensions.

ISAs are potentially taxable on death at a rate of 40%.

Pensions death benefits free from all tax prior to age 75.

Post age 75 pension death benefits tax could also be as low as nil.

Spend non-pension assets first to reduce the value of the IHT

taxable estate.

Move assets from ISA to pension to remove value from your

taxable estate.

How does it effect what my loved ones get? Joint estate of £1,650,000.

Made up of…

Gross income required of

£25,000 per annum.

Retire at age 60.

Joint Life annuity rate 5%.

What happens 10 years on?

Asset Value

House £ 850,000.00

Cash and investments

£ 300,000.00

Pensions £ 500,000.00

Total £1,650,000

How does it effect what my loved ones get?

Annuity route

House £750,000

ISA and Investments £300,000

Pension(£500,000) -

Estate Value £1,050,000

IHT Threshold £650,000

After Tax Estate £890,000

Drawdown route

£750,000

£300,000

£250,000

£1,300,000

£650,000

£1,140,000

Spend other assets

£750,000

£50,000

£500,000

£1,300,000

£650,000

£1,240,000

What you should be aware of? Pension legislation is complex and often changes, on-going advice is

essential.

If you are still funding pension accounts be careful of contribution limits and

total pension savings limits.

There are several methods of de-cumulating your pension savings.

Pension death benefits are not always tax fee and interact with the rest of

your estate.

Accessing pensions via the drawdown methods involve investment risk.

Your circumstances are different to anyone else, be sure your explore all the

available options.

Summary Start planning now.

Set your retirement objectives with the help of a professional advisor.

Consider your finances as a whole, not just pensions in isolation.

Consider death benefits too, not just income generation.

Make sure your plans remain flexible in case things change.

Ultimately you can keep control and create the retirement you

deserve.

Question time.

As individual circumstances vary considerably from person to person, the views expressed in this presentation are meant only as a general guide, and any specific advice should be sought from your own professional adviser or by contacting either Swindells

Chartered Accountants or Swindells Financial Planning. No responsibility for loss resulting to any person acting as a result of any material in this presentation can be accepted by the presenter or Swindells LLP or Swindells Financial Planning Limited.