Let’s hope we can look forward to a little stability under new Prime Minister Rishi Sunak – initial reports at the time of writing on Monday suggested the markets had responded well, Sterling was up and Gilt yields were lower.
Time will tell of course and Mr Sunak has a very large task ahead of him thanks to the energy crisis, surging inflation and a large government debt – much of that due to Mr Putin and Covid of course.
Certainly the new Prime Minister and whomever the Chancellor may be, have some difficult tax and spending decisions ahead as they need to ensure market stability as well as try to –prudently – encourage new growth.
Is your pension enough for retirement?
A recent study has found that three in 10 retirees in the UK are worried they don’t have enough money to p[ay for their retirement.
The Fidelity International study of 3,000 adults has suggested 24% of retirees facing a shortfall have considered returning to work part-time.
It also found that one in five (19%) of retirees who are struggling with the cost of living said they have considered downsizing their homes.
A further 12% said they are debating stopping financial assistance to their families.
Those going back to work still need to consider the effect this will have on their pension.
Under the Money Purchase Annual Allowance (MPAA), once you take any money from a tax-efficient pension, you can then only contribute up to £4,000 per year to your pensions while benefitting from tax relief.
So compared with the full annual allowance of £40,000, this could make a big difference to your future income in retirement.
Meanwhile, average final salary transfer values have been seen at between 25-40% lower than just a year ago, from what we hear and if you have left it until now to transfer, it may be too late.
If you have deferred benefits from a salary-related scheme, then time is against you if you are thinking of a transfer, if it is the right thing for you.
You want to hope your actuaries and trustees are a little behind the curve and so you can grab a transfer value now to at least fix three months’ guarantee when they can’t change the figure.
A recent case in the national press reported how a member of a scheme saw his transfer value fall from £740,000 to £340,000 since last year as interest rates have risen.
If you have concerns, please don’t hesitate to get in touch if you think we can help advise you.
