News & Insights

Ten Reasons you should be saving into a Pension


Jessica Amodio, Adviser & Pension Transfer Specialist
3rd February 2021

  • 1. The earlier you start, the less it will cost.
    You are never too old to start saving. However, if you start saving aged 18, you will only need to put away half as much compared to starting saving in your 40s. The additional years of saving means you will have the same return due to compound interest.
  • 2. Put yourself first.
    If you put off saving because of other demands on your finances, you are likely to find yourself years down the line struggling to catch up. Moments in life will require your attention; weddings, mortgages, children, but remember that your retirement is also important. Start small, and increase your contributions as and when your salary allows.
  • 3. Take advantage of tax relief.
    Pensions are very tax efficient. If you are contributing into a personal pension you will benefit from the government boosting your contributions. A basic-rate taxpayer gets 20% back on their pension contribution, a higher rate payer gets 40% and a top rate payer gets 45%. In basic terms – for a basic rate taxpayer, every £80 you save, you get £100 in your fund.
  • 4. Frugal or fun?
    The current full state pension is £175.20 per week. Once the bills come out, this does not give you much to live on. It certainly will not pay for any holidays you would be looking forward to jetting off to in your spare time! If you want a decent income in retirement then the responsibility is on you.
  • 5. Take advantage of employer contributions.
    If you are offered a chance to save through a workplace pension, then your employer will match some or all of your contributions. Take them up on the offer – they are boosting your pension pot by a considerable amount and this will add up over the years.
  • 6. Tax-free cash.
    Personal pensions and most workplace pensions will allow you to take 25% of your pension savings as a lump sum when you retire. You can use this to top up savings elsewhere, take a well-deserved holiday, or pay off liabilities. Much of this cash will have been contributed by an employer or taxman, but you are enjoying the benefit.
  • 7. Flexibility.
    Previously, one of the major downsides to saving into a pension was that your only option at retirement was to convert the income into an annuity for life. This was incredibly bad value, and choosing the wrong permutation, meant that spouses were left penniless when their other halves died. Fast forward to now, you have the flexibility in many schemes to choose to take as much income as you need. This income can be increased, reduced, stopped or restarted as and when your needs changed.
  • 8. Your loved ones will be looked after.
    Should you die before or whilst in retirement, your remaining pension fund held in a personal pension would be passed to your beneficiaries, with either no or very little tax to pay. The fund is also held outside of your estate for Inheritance Tax purposes. If you are in a workplace pension there is normally a lump sum payable to your beneficiaries should you die whilst still in employment.
  • 9. Benefit from the ‘downs’ as well as the ‘ups’.
    If you are paying into your pension regularly, then you may benefit from periods of stock market volatility. When investment values are low, you buy more units with your contribution than you could have when unit prices were higher. When the market recovers, the units bought will benefit from the recovery.
  • 10. Early retirement.
    If you are unable to keep working due to ill-health, most schemes will allow you to take your pension early. This is reassuring for people who may not be able to take out health policies elsewhere. Defined benefit schemes also usually offer some enhancement to offset the fact you have been deprived of saving for longer.

If you have any questions regarding the issues covered above, please do not hesitate to contact your adviser at GDA Financial Partners.


Important advice for dealing with suspicious emails


Gerry Caley, Senior Partner
26th January 2021

We have recently been made aware of a scam within the financial services industry whereby fraudsters purporting to be from the Financial Conduct Authority (FCA), or law enforcement, are targeting clients of investment management firms (e.g., FundsNetwork, Old Mutual, Cofunds, etc.), advising them that a specific investment manager or the firm is under investigation. As part of this scam, the fraudster specifically asks the client not to speak to their investment firm or friends and family as this would be considered “tipping off”. The client is then advised to encash their portfolio and to move the cash to their bank account. Once this is done, the fraudster then recommends an investment which is a scam.

We would like to use this opportunity to remind you to be extra vigilant if you receive any unexpected communications from third parties relating to your relationship with your investment firms. If you do receive suspicious instructions, please do telephone your adviser at GDA Financial Partners to check its legitimacy.

What to look out for?

  • 1. Scams often start by the fraudster hacking into an email account and tracking email exchanges. Please keep your email security measures up to date.
  • 2. Scams often use fake email addresses and websites. Look out for words mis-spelt, or email addresses and names you are unfamiliar with.
  • 3. The email will often ask you to do things, in secret and/or quickly.
  • 4. If in doubt, check the FCA warning list – this will help you check an investment or pension opportunity and avoid scams.
  • 5. You can also find more advice on www.fca.org.uk/scamsmart.

If you have any questions regarding the issues covered above, please do not hesitate to contact your adviser at GDA Financial Partners.


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