“The Chancellor has dealt a blow to higher rate tax payers today following his decision to cut the pensions tax relief allowance from £50,000 to £40,000 as part of a drive to save the Treasury what is estimated to be as much as £600 million a year1 and in addition cut the lifetime allowance from £1.5 million to £1.25 million. While a cut in the annual allowance is likely to affect a relatively small amount of people, it is sending a mixed message to savers, especially as it comes at a time when the government is implementing its auto-enrolment initiative in an attempt to address the nation’s retirement savings gap.
“We would encourage people affected by the forthcoming changes to consult an independent financial adviser (IFA) to understand how they will be affected by these changes and what they can do to minimise the impact on their savings. Taking advice not only helps consumers make sense of the current rules, but it also prepares them and their finances better for a life after work. Our unbiased.co.uk /Standard Life ‘Value of Advice’ report shows that taking independent financial advice could provide consumers with a retirement income boost of more than £2,780 a year on average, which could increase your monthly pension by as much as £2322.
“The unbiased.co.uk search enables consumers to confidentially search for an adviser who specialises in a specific product area like pensions, but also helps them to further narrow down their search by qualifications, testimonials and specialist accreditations (such as Chartered, Certified, Society of Later Life Advisers (SOLLA), ISO and BS standards). Consumers will also be able to refine their search even further by including details of the size of their pension and amount they are able to invest. Helping consumers select the right adviser from over 15,000 listed in the directory will ultimately mean that they can make the best decisions for their individual situation and feel confident in their financial provisions for the future.”
ENDS
6% annual investment return after charges, monthly contributions escalating by 2.5% per annum, 2.5% inflation
Annual paying joint life annuity with 50% spouse’s benefit, 3% escalating
All to age 65
IFA advised on pension planning:
Average monthly pension contribution: £167.01
Average pension pot at age 54*: £74,554.30
Total pension pot at retirement age of 65: £175,121
Annual retirement income of £5,921 (£493 monthly) in today’s terms
* based on a 54 year-old, the average age of those answering the retirement saving question in our research
Non IFA advised:
Average monthly pension contribution: £108.00
Average pension pot at age 54*: £37,277.10
Total pension pot at retirement age of 65: £92,616
Annual retirement income of £3,132 (£261 monthly) in today’s terms
* based on a 54 year-old, the average age of those answering the retirement saving question in our research
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About unbiased.co.uk, the professional advice website
Unbiased.co.uk is the UK's most comprehensive free professional adviser search website, focused on empowering users with the resources they need to make better informed financial and legal decisions. We not only help consumers and businesses find the best adviser for their needs from over 20,000 IFA’s, financial advisers, mortgage advisers, solicitors and accountants listed on our search but we also help them research the market by providing relevant information and tools. At unbiased.co.uk we like to be transparent about what we do and aim to provide the easiest way for consumers to find and compare advisers meeting their requirements.
The unbiased.co.uk website launched in 1998 and rapidly became the UK’s leading online destination for consumers and businesses looking to find an adviser. Now attracting over one million visitors a year, unbiased.co.uk is the default adviser directory for consumer websites recommending their audience to ‘Find an adviser’.
Unbiased Ltd promotes the benefits of financial and legal advice to consumers and businesses and is supported by the following companies:
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Category: News Tagged: Tax Relief
