Independent Financial Advisors - IFA Bolton, UK

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A-Day The Main Changes
A-DAY: The Main Changes

One of the main changes is that, regardless of whatever type of pension you may have, you and your employer will be able to pay up to one annual allowance for that tax year. This amount is up to 100 per cent of your earnings and for the tax year 2009/10 this allowance is capped at £245,000, with the limit set at £3,600 for low or non-earners paying into personal and stakeholder pensions.

The single allowance rule does away with the sometimes baffling calculations individuals faced under the old tax regulations in order to work out what they could pay into their pensions.

It is hoped the end of complicated calculations removes one of the barriers preventing people from saving more.

A further move designed to encourage us to save more is the greater ease with which people can save into a number of different pensions at the same time under the new rules, compared with the old.

That said, within the contribution limits, the onus is still on individuals to work out how much they ought to be saving and how much they can realistically afford to put aside.

It remains as important as ever to strike the right balance between saving enough for retirement while not leaving yourself either short of cash month to month or for rainy days and predictable large costs such as school or university fees, even your children’s weddings.

At Independent Financial Advisor we will help you to steer through this sometimes tricky path and find the right balance, by looking at your retirement savings and your entire financial circumstances together.

We will also help you work out how much you can afford to save and what you should be aiming to put aside over the years and importantly, how much you will need to save now to maintain the quality of life you want in retirement.

Research in 2005 by the Association of British Insurers indicated that more than 60 per cent of people are not confident that they will have enough money to live comfortably during their retirement. With the right advice, you need not be among this number.

Anyone planning for their retirement, however distant, ought to recognise that the Government is looking to discourage people from retiring early. The earliest age pensions can be taken increases from 50 to 55 in 2010. Anyone planning to retire early in the next five or so years will almost certainly need to speak to an adviser to work out how the change will impact upon their plans.
 
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