My Retirement, my way 

Slide 1

Hello and welcome to this webcast recording provided by Aviva who provide your pension.

You may pause or rewind this recording at any time.

Slide 2

Before we go any further there is some important information that we need to share with you.

The following presentation should not be regarded as giving any form of financial or investment advice. You shouldn't make decisions on the basis of this presentation alone. If you require advice you should contact a financial adviser.  You can find one using the website shown on the screen.

This presentation is based on Aviva’s interpretation of present laws and HM Revenue & Customs practice for the current tax year. The tax benefits may change at any time and their value depends on your personal circumstances.

The value of an investment can fall as well as rise and it is not guaranteed. You may get back less than the amount that’s been invested.

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So, what are we going to be covering today and how can we help you? Please pause and take a moment to read the information on the screen before moving on.

Slide 4

As people are living longer it is more important than ever to save for retirement.

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When you stop working, you don’t stop spending.

Slide 6

Let's now look at the transition from work to retirement, think about what you are looking forward to and what your concerns are. Maybe pause for a moment to consider the questions on the screen before moving on. 

Slide 7

Planning your finances in retirement.

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A key factor in experiencing a satisfying retirement is planning. Think about the level of income you're likely to need in retirement. What will you spend your money on? Don’t forget to include essential items like paying the bills as well things like travelling, sports and hobbies.

Slide 9

Your retirement income is likely to come from a number of different sources, we’ll look at a few over the following slides.

Slide 10

State pension and benefits.

Slide 11

The new full state pension for the current tax year is shown on the screen. If you're entitled to a state pension, when will you get it? The current State Pension age has increased to 66 and the government is planning to increase this further in the future.

You’ll usually need to have 10 qualifying years on your National Insurance record to get any new State Pension. You’ll need 35 qualifying years to get the full amount. You may get less if you were contracted out before 6 April 2016.  Pension credit gives you extra money to help with your living costs if you are over state pension age and on a low income. Would you or someone you know qualify for pension credit? If you would like more information about your state pension age, would like to get a forecast of what you might get, or details about 'contracting out', or pension credit, you can go to the Government website www.gov.uk.

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Other state benefits are also available. Details of these can be found on the website shown on the screen.

Slide 13

Equity Release can give eligible homeowners aged 55 or older access to some of the money tied up in the value of their property.

Equity Release helps you release cash for whatever matters most in life.  We have listed some possible uses for equity release on the slide.

Please note that there are costs and risks associated with Equity Release. If you're thinking of taking out an equity release product, you should take advice from a regulated financial adviser. The government backed MoneyHelper website has useful information on equity release

Slide 14

Retirement savings

Slide 15

Under a Defined Benefit Pension benefits are broadly based on a calculation using an 'accrual rate', the level of your pensionable pay and the length of service you have.

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Under a DC Pension the benefits are based on: Level of contributions, investment returns and charges. Savings in a DC pension are invested to help them grow. Investments can fall in value as well as rise. You may not get back the amount invested.  

Slide 17

A Master Trust is a pension scheme designed for multiple employers under one trust arrangement.

Each employer has their own section, administered separately but benefiting from being under one trust.

A single Board of Trustees looks after the Master Trust. The Board is accountable for all aspects of the scheme and has the power to make independent decisions about investments or service providers for example. Everything the Board does is in the sole interests of the members.

All Master Trusts must be authorised by the Pensions Regulator. They are continually monitored by the Regulator to ensure that they meet the high standards required to remain authorised. Members can therefore take comfort that the Master Trust is well run with their interests being the top priority of the Board. 

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Flexible ways to take your pension

Slide 19

As long as you’ve reached the minimum pension age, there are now several ways in which you can access your pension savings.

The 'minimum pension age' is currently 55 but is rising to 57 from 6 April 2028. You may be able to access it earlier such as when you have a protected pension age or can't work due to ill health or incapacity.

Slide 20

Please pause for a moment to read the information on the screen about how your pension income is taxed before moving on.

Slide 21

Please pause for a moment to read the information on the screen about how your pension income is taxed before moving on.

Slide 22

You could use your pot to buy a guaranteed income for life – known as an annuity You can normally withdraw up to 25% of your pot as a one-off tax-free lump sum then convert the rest into a taxable income for life called an annuity. There are different lifetime annuity options and features to choose from that affect how much income you would get. You can also choose to provide an income for life for a dependent or other beneficiary after you die.

Slide 23

You can take your whole pot as cash

You could close your pension pot and take the whole amount as cash in one go if you wanted to. Normally, the first 25% will be tax-free and the rest will be taxed at your highest tax rate – by adding it to the rest of your income.

There are many risks associated with cashing in your whole pot. For example, it’s likely that you’ll receive a large tax bill, it won’t pay you or any dependant a regular income and, without very careful planning, you could run out of money and have nothing to live on in retirement.

Slide 24

You could use your pot to provide a flexible retirement income – known as flexi-access drawdown. With this option you can normally take up to 25% of your pension pot of the amount you allocate for drawdown as a tax-free lump sum, then re-invest the rest into funds designed to provide you with a taxable income. You set the income you want; this could be on a regular or adhoc basis. Unlike with a lifetime annuity your income isn’t guaranteed for life – so you need to manage your investments carefully.

Slide 24

You can take small cash sums from your pot. You can use your existing pension pot to take cash as and when you need it and leave the rest untouched. For each cash withdrawal, normally the first 25% will be tax-free and the rest counts as taxable income.

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Please pause for a moment to read the information on the screen before moving on.

Slide 27

Please pause for a moment to read the information on the screen before moving on.

Slide 28

As you get closer to retirement it is important to review your benefits and there are several things that can help you: Pension Wise from MoneyHelper is a free, government-backed service, offering clear, impartial and specialist guidance on your retirement options. If you're aged 50 or over, this service is available to you. Visit moneyhelper.org.uk/pensionwise or call 0800 138 3944 for full details of the service. We strongly recommend that you seek financial advice if you are unsure which options may be right for you. There may be a charge for this advice. Please read the screen to see how you can find a financial adviser.

Slide 29

If you have several pension plans, transferring some or all of them into one pot could make financial sense. Each potential transfer needs to be considered on its own merits. …. And there are pros and cons to consider. The potential benefits of transferring to your new scheme are:

- All your pension funds would be consolidated in one place

- The charges could be lower than in your existing scheme

- Access to new pension freedoms when you reach the minimum pension age

There are a number of factors to consider: there may be penalties if you transfer; you may be giving up valuable guarantees; and you could miss out on potential market growth while the transfer is taking place. There may be differences in fund charges and fund selection. There is no guarantee you will be better off if you transfer. If you are unsure if a pension transfer is right for you, you should consider seeking financial advice.

Slide 30

As you approach retirement you will receive a letter and a brochure explaining the retirement process, and in the immediate run up to retirement you then select how you would like to take your benefits. Unless you tell us that you've decided to delay   your retirement, we will issue a reminder letter.

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As a member you will have access to an online account making it easier for you to plan and save for your future. In addition to giving you information about your pensions value and where your money is invested you will also have access to our tools and calculators.

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There is a lot to consider as you approach retirement, please pause for a moment to look at the information on the screen so you can think about your next steps, before moving on.

Slide 33

Thank you for listening we hope this presentation has been useful.