The basic state pension currently pays less than
£100 per week. Is this enough for you to live on?
People often ask us how much they should be saving for their retirement. The truth is, no matter how much you should be saving, there are very few people that are actually saving enough.
Imagine working hard your entire life only to live in poverty when you retire? It’s a pretty grim reality right? You can forget that golf club membership, endless holidays, and spoiling the grandchildren, because unless you start thinking about a Pension RIGHT NOW, you’ll be scraping around on government handouts when your working days are over.
The key to a long and happy retirement is to start saving as early as possible. The problem is that the longer you leave it before you set-up a pension, the worse the situation will get. If you delay starting a pension by just one year, the annual pension you will receive when you retire can reduce by thousands.
Act now! Contact us today for a FREE consultation. We have helped people from all over the country secure their financial future by setting up a pension. But don’t just take our word for it, here’s what some of our customers are saying about our pensions service:
“C&F Mortgages were a great help in finding the right pension for me.” Steve Dyer
“You gave me a much needed helping hand in sorting out my pension.” Melanie Jones
“I really have benefited from using your service. Thanks very much!” Simon McConnell
We know that pensions are one of the few remaining tax breaks available to contractors
Although life as a contractor does come with it’s perks, you are not ‘taken care of’ in the same way as a permanent employee. The inevitability of getting old and retiring is not always in the forefront of a contractor’s mind, but retirement planning remains one of those things where procedures have to be put in place to offer you that little bit extra.
Since the emergence of IR35, contractor pensions are a hot topic, as they remain one of the only tax breaks contractors still have. When investing in a pension scheme, the money to be used comes out of your gross income, which guarantees a high rate of tax relief. This could as much as 48% and will vary based on your income. The amount invested is allowed to grow in a pension fund that is tax free, resulting in a profitable return on your money. In comparison, other investments where funds to be invested are taken from your net income may not show as much of a return.
We can provide two type of contractor pensions;
1. Personal / Stakeholder Pensions
2. Executive Pensions.
Personal / Stakeholder Pensions
With the exception of contractors who have already invested in an executive pension, anyone is welcome to invest in this plan. Irrespective of salary, most are allowed to invest up to £300 per month. If an individual wants to invest more, allowances related to age can be utilised.
Even though they are dubbed ‘Personal’, these plans can and should be funded from the contractor’s limited company. Initially, contractors nominate a ‘base’ year of their choosing from the last 5 years. They then invest on the basis that they are earning this much by way of salary in the present year. This can work in the contractor’s favour as funds transferred from company to pension funds are maximised due to the use of a higher salary figure from non-pensioned permanent days.
Stakeholder pensions are seen as being very similar to personal pensions with the exclusion of having a 1% cap on charges levied by scheme providers.
Executive Pensions (EPP)
Whilst building their businesses, executives, entrepreneurs, and businessmen sometimes neglect planning for their pension. This is where executive pensions come into play. HMRC will set allowances based on marital status, how long you have been with the company, and previous pension history, for any given salary or age. Thus, a greater range is offered via EPP in relation to a personal pension/ stakeholder plan due to these maximum-funding calculations.
The negative side of this plan is that the benefits are salary related and may not be ideal for limited company contractors. Also, even as a niche pension product, providers have continued to charge high administration fees for this service.
Which provider?
When choosing a pension provider, you should be able to answer yes to the following;
- Does the provider provide low set up costs?
- Is the plan flexible enough to be able to cope with you not always being a contractor?
- Will you have the ability to manipulate contributions on a monthly basis?
- Does the provider exhibit enough financial strength to be around in 10 years?
If you answered yes to the questions above, you are well on the way to choosing a provider that is right for you. Of course, we can assist in this process by taking you through the options available, based on your individual circumstances.
Thanks for taking the time to read this page. We look forward to working with you.
Sincerely,
The C&F Mortgages Team
p.s. Just think! You’ll never again have to worry about living in poverty when you retire. Fill out your details below and we’ll be in touch within the hour!
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