Marden & Co Accountants: Pension Myths

However, I came across a few Pension Myths that I really wanted to share with you, that you might not be aware of.

The Government has promised us that from April 2015 we will get free financial advice one to one. Many firms will skirt round this issue of ‘one to one’ advice by installing more interactive tools on their websites, so as to avoid any complaint of poor advice. The best advice I can give you, go see an independent financial adviser. They won’t be biased or avoid giving you advice! Loads can be found online at around £150 an hour, so keep in mind £450 for a comprehensive consultation. www.unbiased.co.uk is a great site.

Now I have in the past given relationship advice, I would like to add it is only to do with financial matters! I am often asked about who is entitled to what after a divorce occurs. For example the ex-husbands pension: if the wife gets the family home the husband is often allowed to keep his pension as a trade-off. This is usually when the man has bought an annuity from their existing pension provider to get a single-life annuity, as it gives them a higher income. However, when they die, so does the pension. So make sure you have your own pension provision, or that your husband provides for you with the annuity he takes.

Who actually qualifies for a pension? If you are self-employed you won’t be covered, and if you are employed but you earn under £10,000 a year, due to maybe being part time, you also don’t qualify. Make sure when you do start a new job, that you ask your employer what your pension options are. By 2018 contributions will rise, employees will be paying in around 4%, your employer 3%, whilst the tax relief will pay just 1%. So do consider topping up your scheme. If you are self employed or earn under £10,000 it is really worth your while going to speak with a finical advisor to see what you can be doing with your money for when you retire.

I am keeping it short but sweet this week, or at least as sweet as it can get with a pension! Enjoy the weekend!