It’s a good idea to work out how much money you’ll need to retire, so you can live a comfortable lifestyle and pay for the cost of care, should it become necessary. Taking out pensions is an effective way to save for retirement, but what if for whatever reason, you decide to change your providers? What should you do? Prestige Tax and Trust Services reveals how to transfer your pension fund.
Saving for retirement
It’s important to plan your retirement income, so you can provide for yourself, as well as secure your loved ones’ future. If you figure out how much you’ll need to live and put aside some money to pay for a place in a care home, you can reap one key benefit. You will be able ensure that your assets, such as your family home, are not used to cover the cost of care, so you can pass them onto your family.
You will have a base income whatever happens, as we are all entitled to the state pension. But at £155.65 per week (if you retire reach state pension age on or after 6th April 2016), this is not much to live off. You are entitled to be entered into a workplace pension scheme by your employer, bumping up the pot. But it is wise to take out a private pension, to ensure you have enough money later on.
Choosing your provider
There are so many pension providers – how do you choose the right one? It is key that you shop around, using price comparison sites such as Money Advice Service, to determine which provider and type of pension is right for your circumstances. You should also see if they levy any charges, such as if they impose costs for missing payments or taking your pot out early, to ensure value for money.
But circumstances change. What was the best provider when you first opened your pension, may not be anymore. You might change jobs, for example, and want to switch your workplace pension, or your current scheme may be winding down, so you need to find another. You might just decide that you want a better scheme. What should you do? You can just transfer your pension fund to a new provider.
Transferring your pension fund
You can transfer your pension fund from one British pension scheme to another fairly easily, and the transaction will be tax free. You should contact your both your existing and new pension scheme, inform them of your wishes to transfer and they should help you complete the process. You should check beforehand, however, that your current fund allows transfers and your new ones accepts them.
There are several things you may be required to do, however, if you transfer your pension fund. You might have to pay a fee to either provider to execute the transfer, and you will almost certainly be required to make regular monthly payments into the new scheme. You may also lose certain rights from your old pension fund, such as the ability to take out your pension at a certain age, receive any fixed/enhanced protections you currently have or remove a 25% tax free lump sum from your pot.
Prestige Tax and Trust Services
If you find the right pension provider, you could reap the benefits in later life. You will have the money necessary to live a decent lifestyle and ensure your assets can pass to your loved ones, as you will have the cash needed to secure a place in a care home. If you have further enquiries concerning cost of care issues, get in touch with Prestige Tax and Trust Services. We are experts in these matters, so we can help you plan how to save for retirement, while ensuring your family remain financially protected.