How can you Improve the Pension Scheme you Offer?

The three main questions I get asked on a regular basis are the?key questions?regarding workplace pensions:

·??????What age can I retire?

·??????How big a pension do I need to retire?

·??????How can I maximise my pension pot?

As an employer you can help your employees work towards their retirement goals by regularly reviewing the pension scheme you offer them and making sure that it is working hard for them and you as the employer.

Through reviewing the pension scheme, you offer can save your company money through the following;

·??????More streamline processes through provider support and reducing the time spent providing information to providers each month.

·??????Involving a financial adviser who will come and review the pension scheme on??????????????a regular basis to make sure it is still meeting your needs

·??????Making sure the pension is set up on the correct basis which saves the company on national insurance and the member on tax and national insurance.

·??????Finding a provider that can offer investment options to you and the members.

As providing a pension to employees is now mandatory for qualifying employees and non- qualifying employees (where requested) reviewing your offering is crucial to making sure you are making the most of the above points.

Because of this change in legislation, we are seeing providers becoming more and more competitive in the group pension market to provide good, low-cost schemes for companies to take advantage of.

In them doing this it provides a good platform for your employees to have an experience of saving for retirement and being provided a service that allows them to understand their retirement journey.

What does a review look like?

Requesting a review of your current scheme against the current market would intel the following:

·??????Providing authority on your current scheme for information to be gathered on the current scheme.

·??????On receipt of the information it will be reviewed on the basis of costs, set-up, performance and options within the scheme for investment.

·??????This information will be reviewed against the whole of market to see if there are alternatives that can save the employer and employee money.

·??????Once all information has been collated, we would present our findings to you and discuss the next steps.

Going back to the first question and 3 bullet points I have provided some facts around these questions that we get asked.

?At what age can I retire?

I find that when people reach age 50, part of the process of reaching this milestone (as well as looking back on their lives and achievements) is to start to look forward to the next chapter, and evaluate their plans and goals.?

The earliest age which you can access cash from your pension is 55 and for some it is the beginning of a move into semi-retirement, with most aiming for 60 or 65 for their full retirement, and a transition to the long holidays and well-earned leisure time.

How big a pension do I need to retire?

As you approach the big ‘Five-Oh’, you might be wondering what is a good pension pot value to aim for.?This will depend on your circumstances, but according to the Pensions and Lifetime Savings Association, a single pensioner would need a pension of ￡10,200 a year to live a “minimum level” lifestyle in retirement.* This allows for you to cover basic needs and have a little spare income for example for eating out once a month, and a UK holiday once a year.

This basic level should be accessible for many when you consider that the current maximum new State Pension is ￡9,100 a year.

However, if you would like a “moderate” lifestyle with more financial security and flexibility, such as eating out several times a month, and a two week European holiday each year, you need to be aiming for an income of ￡20,200 a year.?

For a “comfortable” retirement with more financial freedom and luxuries, the income needs to be in the order of ￡33,000 a year.

Capital Planning Partners is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority). Capital Planning Partners is a trading name of Capital Financial Advisors LLP.

*https://www.retirementlivingstandards.org.uk/news/retirement-living-standards

February 2021

**Association of British Insurers, May 2020