Wyldecrest Parks

Today's retirement is very different. Gone are the days when it was a gradual slide away from a full life. With current life expectancies, we can expect to stay fit and active for a considerable number of years after retiring.

You could spend 30+ years in retirement - more than any other stage of your life … and this offers huge opportunities to find a challenging, rewarding and satisfying way of life. Yet many people spend more time planning for their annual holiday than for their retirement!

Retirement planning isn't just financial planning, it's also about personal planning. This is an opportunity to take a step back and ask yourself: 'What have I always wanted to do, but haven't had the time?', 'What do I want out of my retirement?'. Now is the time to be selfish, think about YOU and what what YOU want for yourself from your retirement.

For some people their retirement years are a golden era when they have the time and financial resources to fulfil plans to relocate treat the grandchildren and take frequent or extended holidays. For others despite an apparently comfortable financial position retirement is a time to scrape by on a much reduced income.

With the state retirement age set to increase to 68 from 2050 and the state pension currently providing an income of up-to £5077 pa or £97.65 a week for a single person and £8200 pa or £156.15 a week for a couple in 2010/2011 there is a general feeling that to have the retirement you want and expect you would have to have some form of employer or occupation pension scheme or if one is not available make private contributions and not rely on the state pension that is currently available.

Contributions into registered Pensions attract tax relief at your highest tax rate. Payments are made net of basic rate tax so every 100 invested only costs you 80. If you are a higher rate taxpayer for every 100 that you pay into a pension this costs you 60. The extra tax relief is reclaimed via your tax return. You are normally not permitted to take any benefits from your pension until age 55 and don't forget that under current guidelines you can take up to a quarter of your fund as a tax free lump sum to spend as you wish.

Retirement Contributions are limited to your relevant UK earnings or the annual allowance which is currently £255000 in the tax year 2010/2011. Any contributions above these and you could be penalised with a 40% tax charge! This annual allowance changes to £50000 after 6 April 2011 and you also have the ability to 'carry forward' any amounts of the annual allowance below £50000 from the last three tax years.

The way in which you invest into your pension fund and the level of income in retirement varies and depends on a number of factors including your risk profile age to retirement returns within the chosen fund and the way in which you take the payments. With a vast number of funds and providers to choose from there is a pension strategy to suit most people.

Remember that any tax relief received is dependant on your own particular circumstances and can change in the future. Investment returns from any investment can go down as well as up and the return is not guaranteed.

An Independent Financial Advisor can review your existing arrangements and advise on ways to provide retirement income that comes as close as possible to maintaining your pre-retirement living standards.

Equity Release

In retirement we are often in the situation where we live in a property that has grown in value considerably over the years and may well be mortgage free. For many of us our home is our major asset, and with pension income possibly not keeping pace with general living expenditure increases, more and more people are looking at ways of releasing this locked up capital in their property.

Equity release is the term used to describe the ways you can do this to either provide a regular income and/or a lump sum.

There are two main types of equity release scheme. They are known as lifetime mortgages and home reversion schemes. With lifetime mortgages, the mortgage is repaid from the proceeds when you die or, for example, on moving into a nursing home. In the case of a home reversion you sell all, or a percentage of your home, to a third party and the lender will receive the relevant percentage value of the property when it is sold.

You can usually take a scheme in joint names so that it continues until the second death.

If you release cash from your property you might give it to beneficiaries now, to be used for school fees for grandchildren, for example, or as a method of Inheritance Tax Planning. Alternatively, it may be invested as an annuity to provide a regular income for life.

Equity release is a very specialised type of loan and should be discussed in great detail with all those who may have an interest in the property before being entered into.

You should also take professional advice.

Useful Links
	Direct gov have some great advice on state pensions click here to go to their website
	Later life is a great site, with advice on dating, jobs & working, travel, health & fitness and many other subjects click here to visit their fantastic site.