Charles James MD, Dean Thorpe, recently spoke about pensions at the Taylor Bracewell seminar in Sheffield. On the agenda were auto-enrolment pensions; something which must be provided by small businesses employing 50 people or less.
Auto-enrolment requires all members of staff over the age of 22, earning over £10,000 per year to be signed up to a pension (unless they choose to opt out). If these measures are not put in place by employers, they could face legal action from The Pensions Regulator. These extra costs faced by businesses could result in freezes in staff pay, business recruitment or cut backs to employee benefits.
New pension flexibility means that people are beginning to think about retirement in much greater depth than ever before. As of April this year, anyone that has paid into a pension and is aged 55 and over can withdraw as much from their pension as they wish. This has led to huge lump sums being withdrawn by thousands of people.
Speaking to the Sheffield Star, Dean Thorpe said:
“Historically you took your pension fund and passed 75% of it to an insurance company who bought an annuity, while you took 25% of your pension as a tax-free lump sum on the day you retire. It is more flexible now. Whenever we sit down with clients, we talk about needs versus wants. We establish where you are and how close you can get to where you want to be. You also have to consider how long you are going to live”.
Whether you are concerned about auto-enrolment or are unsure about how to manage your pension, the best course of action is to seek professional advice. Please get in touch if you would like to discuss pensions with one of our advisors.