Pensions

We live in uncertain financial times and nowhere is the uncertainty greater than in the field of pensions, where both the market and the legislation that applies to the field is constantly changing. With investments increasingly uncertain and legislation ever increasingly complex, it has never been more important to take high quality independent financial advice to ensure that you make the very best of your retirement planning. Currently, the level of state benefit is as follows: The State pays a flat rate pension to people when they reach State Pension Age. For the 2000/2010- tax year this is a maximum of £95.25 per week for a single person and £152.30 for a married couple. You may also be eligible for the State Earnings Related Pension Scheme (SERPS) or a proportion of it, subject to your employment and pension history up to April 2002. Depending on your State Retirement Date, this could give you an additional pension of 20% of earnings averaged over your lifetime. The pension is based on ‘Middle Band earnings’ which for 2009/2010 is between £4,940 and £43,875 per annum. Any earnings outside these limits do not count towards SERPS. SERPS was replaced by State Second Pension (SSP) in April 2002. This is intended to provide a similar level of benefit to SERPS for those earning in excess of £18,500 per year and a higher pension than SERPS would have done for those earning less than £18,500 per year. There is also a safety net for pensioners who have little or no income. The Pension Credit is a means tested benefit and the Department of Social Security are responsible for assessing whether individuals are entitled to receive some extra income. As an example for the 2009/2010 tax year the minimum income that a pensioner at age 60 may be entitled to receive is £130.00 per week for a single person and £198.45 for a married couple. In some situations, people who have little other income in retirement could find themselves making savings which simply results in them receiving the same income with less State support. The Government has recognised that this could deter some people from saving and they are looking to develop the Pension Credit further to reward pensioners who have made some provision for their retirement. Clearly, it is essential that people make their own arrangements, in addition to the state benefit available, as this is, simply, not adequate to meet their retirement aspirations.
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