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Pension Advice

Find Out More About the Financial Services We Offer

A pension is a type of savings plan that is designed to provide an income when you retire. It can be set up by you or your employer and regular monthly contributions or lump sums can be paid in. Your retirement planning is vitally important for the future and we’ll make sure that we discuss your needs to find the right solution for you. Call us on 01752 896943 or alternatively, click the button below, and we’ll call you back.

Our Solutions

Final Salary Pensions

Final salary pensions are fast disappearing for new employees and care must be taken when transferring from these plans.

Final salary pensions are based on four key areas:
 
  • The length of the pensionable service you were credited with as being an active member of the scheme, not necessarily the time you have worked for the company.
  • Your pensionable salary.
  • The formula or rate of ‘accrual’ which uses service and salary to work out your pension.
  • The circumstances under which benefits are taken from the scheme (retirement, early payment, early leaver, ill-health, death etc).
Using these four key areas, the pension scheme will have a formula for calculating the income you will receive. There are many different types of final salary scheme, each having its own formula to calculate member’s benefits.

Historically final salary schemes have given better income than personal pensions, however, these are now scarce.

Transferring out of a final salary pension is unlikely to be in the best interest of most people. John Davies Financial Consultancy does not provide advice on final salary schemes.

Personal Pensions

This type of pension is where you, your employer or both can contribute to your pension plan which match your investment attitude.

These funds will rise and fall with investment performance, and it is important that these funds are regularly reviewed, as with any investment, they aim to grow the fund. This can be better than conventional savings.

Group Pensions

This is the same as a personal pension plan, but the individual plans are part of a scheme, so basically an employer has a pension scheme where there are a number of individual plans within it.

Stakeholder Pensions

Stakeholder pensions are available as a personal or group pension.

Executive Pensions

This is a plan which works the same as a personal pension plan but is usually used for the directors or senior staff. There were significant advantages to investing in these products in the early 1980’s but due to pension regulatory changes this is not the case in today’s terms. If you already own one of these pensions, advice must be sought as the terms & conditions were very favourable, and would be lost if the pension was transferred to another scheme.

Self Invested Pension Plans

Self Invested Pension Plans (SIPP) give the individual members a choice of how to invest the contributions. Some investors want more control on how their pension is invested; by investing in a SIPP it gives the investor a greater choice and flexibility.

Some of the different types of investment are:  
  • Deposit accounts (in any currency providing they are with a UK deposit taker)
  • Government securities and other fixed interest stocks
  • Unit trusts
  • Open ended investment companies (OEIC’s)
  • Investment trusts
  • Insurance funds
  • UK stocks and shares including shares listed on the Alternative Investment Market (AIM)
  • Overseas stocks and shares quoted on a Recognised Stock Exchange
  • Unquoted shares
  • Commercial property
  • Ground rents in respect of commercial property
  • Traded endowment policies
  • Permanent Interest Bearing Shares (PIBS)
  • Warrants
  • Futures and Options
Many directors use their SIPP to purchase commercial property to help their business. You can also borrow up to 50% of the pension fund, for example if you have a pension fund of £100,000 then you could borrow an additional £50,000 to purchase a property for £150,000.

Please note that although the legislation allows you to invest in these areas, it doesn’t follow that you should. Some of these investments are high risk and we will not recommend our clients to invest in them, for example, unquoted shares.

Small Self-Administered Scheme

Small Self-Administered Scheme (SASS) are pension schemes established by companies for senior employees, usually company directors.

Like SIPP’s they have wider investment choices, but also have the ability to:
Loan Monies to companies connected to the members (up to 50% of the pension value).
As they are Multi member schemes (unlike a SIPP) they make co-investment very simple and cost effective.

Company Pension (Auto-enrolment)

The Government has made changes to the way we are saving for our retirement. Previously, employees were not encouraged to join a workplace pension scheme but, with effect from October 2012, the Government now requires all employers to enrol all eligible workers into a workplace pension scheme if they are not already in one.

If you meet with any of the following criteria, then you are eligible to join:
  • You are not already in a suitable workplace pension scheme
  • You are at least 22 years old, but under State Pension age
  • You earn more than £10,000 a year (tax year 2022-23)
  • You work in the UK
The following employees must also be signed up to a workplace pension scheme:
  • Full-time
  • Part-time
  • On a short-term contract
  • Your wages are paid via an agency
  • You are off work on maternity/paternity, adoption or carers leave
Even though your employer must enrol all eligible employees into their workplace pension, you do have the option of opting out.

The Financial Conduct Authority do not regulate auto enrolment.

Notes for employees: If you decide not to pay contributions, this means you have opted out of joining and you will lose out on tax relief from the Government on your contributions. If you do choose to opt out, you must complete an opt out form which you can obtain from the person arranging the workplace pension.

The value of investments can fall as well as rise. You may get back less than invested. Tax treatment varies according to individual circumstances and is subject to change.