Over 50s urged to act on state pension, inheritance tax and pension saving – ‘good time!’

Martin Lewis lays out the two types of pensions

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

When reaching 50, many people will be looking towards retirement and their later life plans. However, actualising these dreams can be a challenge, and it may be difficult to know where to begin. 

Express.co.uk spoke to Chioma Patrick, Associate Director and Financial Planner at Coutts.

She outlined the key savings and retirement tips Britons should be putting into motion once they hit the age of 50.

Ms Patrick said: “If you do not have a pension pot in place at this point, consider that any time is a good time to start a pension.

“There is tax relief provided, and income and gains are also tax-free.

“You should also consider ISAs and general investments if pension allowance is limited.”

Pension arrangements can differ, and some will have different plans for their retirement and how to reach their goals.

One scheme considered particularly beneficial is a final salary pension scheme, often described as a “gold plated” pension.

In this instance, Ms Patrick urged people to consider advice if they do not need the guarantee of income in retirement.

DON’T MISS
Boris shamed over Elsie, 77, forced to stay on bus for warmth [VIDEO]
‘Where is it?!’ Britons furious at delays to £150 council tax rebate [LATEST]
Warning issued to Britons who use cash in supermarkets [WARNING]

This is because many people would prefer for their beneficiaries to inherit a pension pot. 

In a similar sense, individuals should begin to think about estate planning and how this might involve their pension.

Thankfully, pensions are not counted when calculating inheritance tax, which shelters this investment.

Individuals are likely to have built up numerous pensions across their lives.

This could be from different jobs, or simply various schemes one has garnered over the years.

As such, it is likely to be sensible for these to be consolidated – placed into one or two arrangements to make sure individuals do not lose track.

Once a person hits 50, they are approaching the age at which they can first access their pension – currently 55.

However, many people still have years left until they actually depart the workforce, so it will be vital to ensure money is managed sensibly until then.

In this sense, Ms Patrick encouraged people to review their risk profile for investments.

While high risk may have suited people in the past, there is now less time to ride the peaks and troughs of the market.

What is happening where you live? Find out by adding your postcode or visit InYourArea

Consequently, moving to a lower risk profile is likely to be more sensible in protecting retirement income in the short-term. 

When it comes to withdrawing a pension, there are key rules to bear in mind or else Britons could face tax or penalties.

For this reason, Ms Patrick encouraged individuals to seek advice on how to draw from their pension in the most tax-efficient way.

Once personal and private pensions have been organised, Britons may wish to turn their attention to the state pension.

Ms Patrick added: “You can make a decision on taking the state pension or deferring it. Check your National Insurance record is complete prior to state pension age.”

Fortunately, this can be achieved with relative ease, by using the Government’s online tool.

In a similar sense, those who are self-employed should also check their National Insurance record to see if there are any gaps.

Finally, Ms Patrick said, evaluating any outstanding debt is key before retiring.

She remarked: “Ensure a repayment plan for any debts are finalised. This should be done prior to retirement age.”

Source: Read Full Article