Most of us are guilty of making assumptions about all kinds of things in life, but none can be as potentially damaging as wrongly interpreting the UK's complex pensions system.

Pension rules are constantly being tinkered with, and it's no wonder people are left bamboozled when it comes to planning their retirement.

With further changes in pipeline ahead of Autumn Budget 2018, this newsletter sets out five of the biggest misconceptions to help you understand the pensions landscape.

1) The state pension is enough to live on

Neither the old nor the new state pension is anywhere near enough for most people to live on.

The new full state pension, which applies to men born on or after 6 April 1951 and women born on or after 6 April 1953, pays a maximum of £164.35 a week, assuming you made national insurance contributions (NICs) for a total of 35 years during your career.

If you have gaps in your NICs record, you will receive less than this amount - but you need to have made at least 10 years of contributions to be eligible for the new state pension.

You can check what your state pension payout is likely to be, and when you'll receive it, on the government's website.

2) Property is as good as a pension plan

Many buy-to-let landlords are relying on these tangible assets to top-up their pension pot, despite cuts to tax relief delivering a blow to their income.

With the facility to offer entire mortgage interest against rental profits to be obsolete by April 2020 , tax will soon be paid solely on rental income.

Holding on to buy-to-let properties is becoming less attractive due to the increased tax liabilities, while stagnating house prices can also make keeping these properties unaffordable in some case.

3) You cannot join a workplace pension until you're 22

You can join a workplace pension as soon as you begin working for an employer assuming you earn more than £6,032 a year. Your employer is legally obliged to contribute to that as well.

The confusion arises because your employer has to automatically enrol members of staff into a workplace pension after they turn 22, but workers under that age can choose to opt-in.

Starting early is not only a great habit to get into, it also makes a big difference to your pension pot in the long run.

4) You cannot opt-out of a workplace pension

Under no circumstances is it advisable to opt-out of a workplace pension due to the value of the employer contributions and tax relief you receive on top of your own contributions.

However, it may make sense to opt out in some circumstances, such as if you are planning to retire in the next year or two.

This theory is backed up by government research, which showed people in their early 60s are most likely to opt out, compared to only 7% of those aged under 30, and 23% of over-50s.

5) You have to buy an annuity when you retire

There is no compulsory obligation to buy an annuity, which can provide you with a regular income usually until you die.

The introduction of pension freedoms in April 2015 gave people over the age of 55 more choice when it comes to accessing their retirement savings.

Other options aside from annuities include taking cash payments, or keeping the money invested and then continuing to draw down from your fund.

Those who do buy an annuity do so because they know the income is certain and is immune from the twists and turns of the stock market.

Therefore, annuities still have an important role to play.

Contact us to discuss retirement planning.

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