As we near the end of the financial year, it’s an ideal opportunity to pause and review your personal finances. If you are choosing this period to review your current pension situation, it’s worth considering the following:
Check what type of pension you have, does it offer flexibility?
Many pensions schemes now offer the option to drawdown early and take cash sums from your fund early. The rules and implications of such actions will vary from scheme to scheme so it’s worth checking with your financial adviser or pension scheme provider.
Do you have any pensions from previous schemes or employers? It may be that these can be consolidated into new pension schemes
If you’ve lost track of old pensions these can be tracked down using the Pension Tracking Service.
It’s important to ensure you make sure you have details of all pensions you have paid into to ensure you are claiming everything you are entitled to.
Take advantage of tax relief
The annual allowance is generally £40,000. There is potential to gain tax relief on additional contributions if you have un-used tax relief from earlier years. It is very likely that Pension Tax Relief will be an issue in the March 2021 Budget.
Check your expression of wish form has been updated
Pensions pots are not covered by wills so you should have, at some stage, completed an expression of wish form provided by your pension provider. It’s worth checking that this form is up to date on a regular basis.
Confirm you are on track for your retirement goals
Review your current plans and check whether you are in line to meet your current retirement goals. The Money Advice service has a useful Pension calculator to work out your likely retirement income.
Carry out a full financial review
The new year is always a great opportunity to carry out a full financial review to make sure your pension plan, your financial plan, and your business aspirations are all aligned and consistent.
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Please note, the information above does not constitute any form of formal advice or recommendation. Appropriate financial advice should be taken before making any pension or investment decisions.