Pension Planning with KGJ
At KGJ, we work hard to ensure your financial wellbeing and peace of mind, guiding you through one of the most important decisions you can make – taking out the right pension. As we get older, we start to look towards retirement and what we’d like to do with our golden years. When it comes to pension planning, the earlier you start, the better.
Professional pension advice will help you get the best from your pension contributions, and even if you have a workplace pension, you may want to give some thought to taking out a private pension, as well. Whatever your current pension status, the independent pension specialists at KGJ are here to advise you and find the very best pension plan for you.
Get Pension Advice On Planning
As independent financial advisors, our only concern is providing our clients with the best possible investment opportunities. Contact us to learn more about our bespoke pension planning services.
Our Pension Planning Services
These days few people have a career with one firm and end up with multiple pensions with different providers from each employment. We can help you consolidate your pensions and prepare for flexible access drawdown in retirement.
Inheritance Tax Planning
Inheritance tax is onerous. Over a certain threshold, it is normally 40% of the value of the estate, including money, possessions and property, of somebody who has passed away. At KGJ, we can help you plan for it.
Long-Term Cash Planning
We have tools that allow us to build a forecast for 60 or more years into the future. Although nobody has a crystal ball, it is possible to see the general direction a savings plan will take you and whether you will be able to get to where you want.
Making the Best of Your Retirement
Retirement should be all about getting the most out of life, and a pension fund is essential for maintaining your quality of life after your working days end. We can help you make your existing pension last longer and do more for you.
Pension Planning in Middle Age
If you start planning your retirement when you’re already in middle age, then there is no need to panic! All is not lost, and a great deal is possible, even in a short time. Get in touch so that we can work out what the best plan is.
Starting Pensions Young
The best time to start a pension is when you start work. Even a very small monthly deposit can end up making a sizeable contribution to a retirement fund that won’t be used for forty years or more. Get in touch to get your pension started.
Why Choose Us?
The Personal Touch
KGJ is proud to offer premium, bespoke advice. To us, 'close enough' is not good enough when it comes to your pension and personal finances. The solutions we provide are always fully tailored to you.
Pensions are a long-term investment. We understand that your personal circumstances, hopes and retirement plans will change over time. That’s why KGJ is here to provide pension advice throughout.
We understand the confusing and bewildering financial language of pensions and it is our job to explain them in everyday language. Your pension is important, and KGJ will ensure you fully understand your commitment and the eventual outcome.
We will listen to your hopes, plans and ideas for the life you want to lead when your working days end, and will help you arrange the pension you need.
We’ve been privileged to provide our services to many different clients over the years. Here’s what just a few of them have said about working with KGJ.
You Have Honestly Been so Fabulous
I just wanted to say thank you so much for all your help, You have honestly been so fabulous and made the whole process so easy and so much less stressful. Thank you so much 🙂
Caroline has always been very helpful when I have needed advice.
I Will Have no Hesitation in Recommending KGJ and Anna
I would like to place on record my appreciation of Anna Burford’s efforts last Friday on my behalf. Due to pick up a new 1 litre Ford Fiesta from the dealers we called my insurer to do what we thought would be a simple task-change the car over. We were told that CIS could not insure the new car! They offered a ridiculously high price with another insurer. My husband called you and spoke to Anna who found out what we needed and quoted a much cheaper premium,which we accepted. I was able to drive my new car away safe in the knowledge I was covered. I now have my documents which are all OK. I will have no hesitation in recommending KGJ and Anna. Many thanks again.
I Trust You and Would Highly Recommend You to Others
Thank you for helping me out with my mortgage. I was in a very stressful situation but from the beginning you managed to make every decision an easy one. I seemed to bombard you with the simplest questions but you always had time for me and made it very easy to speak to you. You even went out your way to resolve any worries I had (I am a big worrier) and you kept me up to date at every stage. I trust you and I would highly recommend you to others (I already have). I can’t thank you enough. With sincere gratitude.
I'm Always Delighted with the Service
I’ve used KGJ as my insurance broker for over ten years, and I’m always delighted with the service they give. It’s so refreshing to be able to speak to a real person on the end of the phone who you feel does get to know you and your individual requirements over time. It may be a little more expensive than one of the Direct Line / Tesco / Compare the stuffed animal type of insurance companies… but it is worth every penny to have someone on your side when you need them.
My husband and I recently engaged the services of Jim Bodycote, KGJ’s financial advisor. As we requested, Jim undertook a full review of our pre-existing personal pensions. Having chatted about our future plans for our pension pots and carried out assesments to determine our acceptable level of investement risk, Jim went on to make sound recommednations for our pension plans going forward. We found Jim to be professional, knowlegeable in his field of expertise, friendly and very importanly, information was relayed to us jargon free. Follow up service has also been excellent. I would certainly recommend Jims services to others.
We have Received a Good Return on our Investments
Eight years ago we found ourselves in need of financial advice regarding investing our severance pay Jim Bodycote at KGJ was recommended by a friend . We find him very friendly, professional and approachable and he has given us sound advice always showing patience with our concerns and questions and we have received a good return on our investments.
Ian and Kim
Helpful, Knowledgeable, Thorough and Nothing is Ever Too Much
John is super professional and really trusted by our family who he has been advising for years. He is always very helpful, knowledgeable, thorough and nothing is ever too much of an ask. You know with John that he will give you the best possible advice and recommend what is most suited to your needs at the time. He along with the team at KGJ are brilliant!
Safe and Trustworthy
KGJ has looked after our business’s commercial insurance needs for many years. We have remained loyal to KGJ as we have always received a reliable service, good advice, and competitive products. We feel in safe and trustworthy hands with Stuart Pearson and all the team at KGJ.
We Don't Know What we Would do Without Him...
John has been our adviser for many years, not just for general financial advice and support but on many and diverse areas such as wills, pensions, investments, insurance, mortgages etc. Both for us and other members of our family. We are amazed by the quick response to enquiries, the virtual counselling and family advice and Johns lovely humour. Nothing is too much trouble. We trust John and admire his confidentiality when he is dealing with other members of our family who he also advises. In fact we don’t know what we would do without him.
Simon and Janni
We were fortunate to find KGJ soon after our move to Stourbridge in 1999 and we have been pleased by their efficiency and the quality of their advice. Financial advice and planning from John Donnelly has, in particular, been exemplary. John brings clarity and a down-to-earth approach to the assistance he gives, not to mention a good sense of humour. We know he will always respond promptly to questions or concerns and we feel able to trust that he will always give the best advice he can. John also looked after the payroll and pensions for the charity we worked for.
Jane & Kevin
Patient, Kind and Super-Efficient
John has been our financial advisor for a number of years, in fact, not only finance but in other areas as well, such as retirement, will’s and insurance. He is knowledgeable in many areas, patient, kind, friendly and super-efficient. We would not hesitate to recommend his services to friends and colleagues (and have done so on many occasions).
What Is a Pension?
A pension is a savings pot that you contribute to during your working years and then use as a source of income during your retirement. In the UK, they are often offered as part of a benefits package from your employer and, since 2012, all employers have been obliged to automatically enrol employees into a pension scheme, unless they opt out. Many people also have private pensions.
Pensions often come with advantages, such as tax relief on contributions and tax-free growth, making them popular for long-term saving for retirement. In most cases, regular contributions during your working years, are invested and then grow over time. It is essential to regularly review pension investments to ensure they align with your retirement goals and keep pace with current market conditions, pension legislation and your financial circumstances.
There are a few different pension schemes available, which is why knowing which direction to go in with your pension can initially feel quite confusing. Thankfully, KGJ is here to guide you through your options in our trademark honest and transparent way. Here are just some of the pensions available in the UK:
- State Pensions: Provided by the government, a state pension is based on your national insurance contributions. It is paid to individuals who have reached state pension age, which you can check on the government website.
- Workplace Pensions: The workplace pension system is a government-mandated programme that requires businesses to enroll eligible employees into, and contribute towards, a pension scheme. Workplace pensions can either be classified as a defined benefit pension (DB) or a defined contribution pension (DC). In DB pensions, the benefit is defined by an employee's income and length of service, whereas in DC pensions, the benefit is determined by the contributions paid in and the pension fund's investment performance. A defined benefit pension may also be referred to as a final salary pension.
- Private Pensions: These are pensions that can be set up by the individual. Private pension benefits are based on your contributions and the performance of the pension fund. Professional pension advice – such as from the experts here at KGJ – is essential when setting up a private pension.
- Self-Invested Personal Pension (SIPP): This is a type of personal pension that offers more flexibility and control over your investments. With a SIPP, you can choose a wider range of investments, including stocks, bonds and commercial property. Professional pension advice – such as from the experts here at KGJ – is essential when setting up a SIPP.
- Stakeholder Pension: This type of personal pension is designed to be simple and low-cost, with specific features mandated by the government, such as low charges, flexibility in contributions, and a default investment option.
Aside from finding the best pension for you, KGJ will be on hand to explain the regulations and occasional changes that make up the UK pension system, as well as the options and implications of the different pension types.
There is no specific limit on the number of pensions you can have – and you can pay into pensions of different types, such as workplace pensions, private pensions and state pensions, as long as you meet the eligibility criteria for each type.
However, the total amount of pension contributions and benefits you receive from all your pensions may be subject to annual and lifetime allowances set by the government, which may affect the amount of tax relief you can claim and the amount of tax you may need to pay. It's advisable to seek professional financial advice from experts like KGJ to ensure you understand the rules and regulations regarding pensions and can make informed decisions based on your individual circumstances.
Your pension may be affected in several ways when you change jobs, depending on the type of pension scheme you are enrolled in. Here are just some possible scenarios:
- Defined Contribution Pension (DC): If you have a DC pension, which is a type of pension where your contributions are invested and the final pension amount depends on investment performance, your pension is typically portable. Although your new employer may not allow you to pay into your old scheme, the old scheme does not close. Sometimes people end up with several such schemes. Whether you have one or several, it is the job of an independent financial adviser, such as KGJ, to help manage your pensions and potentially consolidate them into one.
- Defined Benefit Pension (DB): If you have a DB pension, which is a type of pension where your pension amount is based on your wage and years of service, your pension may be more complicated to take with you when changing jobs and you may not be able to transfer your pension to another employer's scheme or a personal pension plan. However, the pension you have will not close and will pay out to you as planned. If you have any questions seek advice from an independent financial adviser, such as KGJ.
- State Pension: The state pension is a government-funded pension that’s based on your national insurance contributions and is not tied to a specific job or employer. Therefore, changing jobs should not directly impact your state pension. However, your state pension eligibility and entitlement may be affected by factors such as the number of years you have paid national insurance contributions, your earnings and changes in the state pension
Whatever situation you find yourself in with your pension, KGJ is here to explain the process and find the best solution for you based on your individual circumstances. Pension rules and regulations can be complicated and may vary depending on your specific situation and pension scheme, but we’ll be by your side throughout the process, ensuring you understand the steps and end up with the pension solution that’s best for you.
You generally cannot access your pension funds before reaching the normal minimum pension age (NMPA), which is currently set at 55 years old, and is set to increase in the near future. However, there are some exceptions and options, subject to certain conditions and regulations:
- Ill Health: If you are in poor health and unable to work due to illness or disability, you may be able to access your pension funds before reaching the minimum retirement age.
- Serious Ill Health: If you have a life expectancy of less than one year, you may be able to access your pension funds before reaching the minimum retirement age.
- Pension Flexibility: If you have a pension scheme that offers pension flexibility, you may be able to access your pension funds before reaching the minimum retirement age, subject to the rules set by your pension scheme.
- Small Pension Pots: If the total value of your pension savings is below a certain threshold (currently £10,000), you may be able to access your pension funds as a lump sum before reaching the minimum retirement age.
- Pension Transfer: If you have a defined benefit pension (DB) or final salary pension, you may be able to transfer it to a defined contribution pension (DC) and access your pension funds before minimum retirement age. This requires careful consideration and professional advice as there can be costly penalties for making an error.
- Financial Hardship: In some cases of financial hardship, such as severe financial difficulty or bankruptcy, you may be able to access your pension funds before reaching the minimum retirement age, but this is subject to strict conditions and regulations.
Accessing pension funds before reaching the minimum retirement age may have serious tax implications, which is why it's critical to seek professional advice from financial experts, such as those at KGJ, before making any decisions regarding your pension funds. Rules and regulations related to pensions are complex and subject to change, so it's essential to stay informed and consult with a qualified financial advisor for personalised advice.
If you pass away before retiring, the fate of your pension fund is determined by several criteria, including the sort of pension you have, whether you have reached the age of 75, and if you have designated any beneficiaries.
- State Pension: If you have not yet reached state pension age and you die, your state pension entitlements will not generally be transferred to your beneficiaries or estate. However, your spouse, civil partner or qualifying partner may be eligible for some benefits based on your national insurance contributions, such as a bereavement allowance or bereavement payment.
- Defined Benefit Pension (also known as a ‘DB’ or ‘final salary’ pension): If you are a member of a defined benefit pension scheme and you die before retirement, the pension scheme may provide benefits to your spouse, civil partner or dependents. This may include a pension payable to your spouse or civil partner, or a lump sum payment to your nominated beneficiaries or estate.
- Defined Contribution Pension (also known as a ‘DC’ pension): If you have a defined contribution pension, the value of your pension fund at the time of your death may be paid to your nominated beneficiaries or estate. Normally the pension is transferred as-is and can then be re-invested to suit the beneficiaries’ objectives. The transfer of a pension is outside the scope of inheritance tax and no inheritance tax should be chargeable on a pension transfer.
At KGJ, we know that pension rules and regulations are complex and subject to change. We therefore recommend seeking professional financial advice whenever you need to understand the specific implications of your pension, be it in the event of your death before retirement or in any other circumstances.
When changing jobs, you may be able to transfer your pension from your old employer's pension scheme to your new employer's pension scheme, perhaps even transferring into a private pension. The following is an example of steps you can follow to transfer your pension after a career change:
- Check your current employer’s pension scheme: Remind yourself of the details of your current pension scheme, including the type of pension you have, the value of your pension pot, any benefits or guarantees, and the fees associated with transferring your pension.
- Research your new employer's pension scheme: Find out about your new pension scheme, such as the type of pension you have, in addition to any fees, benefits or guarantees. You may need to request information from your new employer or their pension provider.
- Seek professional advice: Transferring a pension can be complex and it's important to consider the implications on your retirement savings. Seek professional financial advice from a qualified financial advisor or pension specialist – such as the team here at KGJ – who will help you understand the pros and cons of transferring your pension.
- Request a transfer value: If you decide to transfer your pension, you'll need to request a transfer value from your current pension scheme provider. This is the amount of money that can be transferred to your new pension scheme or personal pension plan.
- Complete transfer paperwork: You’ll need to complete the required paperwork, which may include transfer forms and other documentation. It is critical to carefully research and comprehend the transfer's terms and conditions, including any fees or charges.
- Wait for the transfer to complete: Pension transfers can take time and the process may vary depending on the pension schemes Once the transfer is complete, you should receive confirmation from both your old and new pension scheme providers.
- Review your new pension scheme: After the transfer is complete, review the details of your new pension scheme. It's important to regularly monitor your pension savings and make adjustments as needed to ensure your retirement savings are on track.
It's crucial to carefully consider your circumstances, including your retirement goals and risk tolerance, seeking professional financial advice before making your pension transfer.
Taking money out of your pension plan may have tax consequences because pensions are subject to specific tax restrictions. Tax ramifications will vary depending on several circumstances, including your age, the sort of pension you receive and the amount you withdraw.
- Age: If you are under the age of 55, you generally cannot withdraw money from your pension, except in certain exceptional circumstances, such as ill health (see ‘Can I access my pension funds before retirement age?’ above). If you do, it may be subject to a significant tax penalty of anything up to 55% of the withdrawn amount.
- Type of Pension: Defined contribution pensions (DC) allow you to access your pension savings flexibly once you reach the age of 55, subject to certain rules. You can usually take 25% of your pension pot as a tax-free lump sum, while the remaining 75% is subject to income tax when withdrawn. On the other hand, defined benefit pensions (DB), also known as final salary pensions, typically provide a fixed income for life and may have different tax implications when it comes to withdrawals.
- Withdrawal Amount: If you withdraw a considerable sum from your pension in one go, it could push you into a higher tax bracket, resulting in a higher income tax liability. It's important to consider the tax implications carefully and seek professional advice to understand the potential impact on your overall tax situation.
Pension rules and tax regulations are subject to change and it's important to stay up to date with the latest guidelines from His Majesty’s Revenue & Customs (HMRC), which are split into state pension guidance and workplace and personal pension guidance. You can also seek advice from qualified financial professionals here at KGJ before making any decisions regarding pension withdrawals.
Other Main Services
For over 50 years, KGJ has been providing businesses of all sizes with independent, unbiased and affordable commercial insurance solutions. With access to a wide variety of insurance products, KGJ will find the right policy to meet your needs.
Saving for the future can bring a great sense of stability and peace of mind to your financial security. Ensuring you obtain honest, professional and tailored advice when investing your money is an essential process that the experts at KGJ will provide.
KGJ provides individuals with personal insurance across a wide range of services. With a collective 100 years of experience across our dedicated personal insurance department, whatever cover you need, we will be by your side throughout.
Taking out a mortgage is probably one of the most significant financial decisions most of us will ever make. Ensuring you get the right mortgage is essential for your sense of financial well-being and peace of mind – and KGJ is here to help.