Experts Reveal The Secret Of Doubling One’s Pension Pot

Experts have discovered a way for millions of workers approaching retirement age to increase their pension pot by almost 100%, it hasDeposit Into Piggy Bank Savings Account been reported.

Since the government’s new rules on state pension plans, many retirees have found they would be worse off if they chose to receive their state pension straight away, as opposed to deferring it.

It is expected that the state pension will increase by 10.4 percent over the next four years, plus an extra five percent for living costs. Therefore, experts have advised that if one can defer their pension for four years and live off their accumulated savings in the meantime, they will have a much bigger pension fund waiting for them by the end.

Alan Higham, retirement director at investment firm Fidelity, said:

[quote]”Many will be looking for a guaranteed income when they retire. If they spend money from their own pension instead of taking the state pension, and hold off for four years, the overall value from their savings pot will double.

“By doing this, the difference is always going to be double what you would expect if you had bought an annuity on day one.”[/quote]

Indeed, new rules in the Budget released recently no longer require workers to buy an annuity with their pension pot when they retire. The option to live off one’s own savings and defer taking their state pension is the new alternative for those trying to play it safe and save more money.

However, as the rules are set to change again in 2016, only those looking to retire in the next two years will be able to take advantage of this tactic. Financial experts have also warned that there are still risks with adapting this approach.

For one, the government could change the rules again, which could see the 10.4 percent rate decrease or even drop to zero. If another Government happened to be elected, it could also have its own plans for the pension.

Yvonne Goodwin of Yvonne Goodwin Wealth Management said that deferring one’s state pension is a good idea, but only if one is on top of their own finances. She also pointed out that spending one’s savings was not the only way to defer taking the state pension.

[quote]”It is a good idea to maybe get a part-time job and leave your pension, and your state pension, to grow. While your money is in a pension fund it is tax-free.”[/quote]

she said.

Campaigners Push To Raise State Pension To £175 Per Week

Earlier this month, campaigners presented their case for the UK State Pension to be increased to £175 per week, at the Pensioners’pensions-credit-uk Parliament in Blackpool.

The three-day event gave campaigners a chance to voice their concerns over the current quality of life for older people living in Great Britain. The proposal that the State Pension be raised to £175 per week was just one of the key issues raised by the campaign group, the National Pensioners Convention.

At the moment, the basic State Pension rests at just £113.10 per week, which the Convention says is not enough to support individuals in later life.

They claim that £175 per week is the minimum income needed to live above the poverty line.

[quote]“The UK is not an easy place to be for many older people right now.

“Despite what some people say, pensioners have not escaped the Government’s austerity programme.”[/quote]

They went on to point out that cuts to the winter fuel allowance; rationing of care services; changes to the way pensions are uprated annually and the government’s freeze on tax allowances are all beginning to “take their toll” on the retired and the elderly.

This is all happening as the cost of living rapidly rises, creating a hazardous environment for retirees to enjoy later life. The Convention summed up the UK state pension system as “one of the worst in Europe”.

In light of the current chokeholds on pensions, new research revealed that more than 70 percent of people are likely to continue working past the State Pension age in order to boost their pensions. The study was carried out by Metlife and included an analysis from former pensions adviser Ros Altmann. Altmann surmised that working one full extra year, plus two more years part-time, could boost one’s pension fund by 11 percent.

However, the study also showed that only 20 percent of workers believe they are saving enough for retirement, whilst 41 percent do not understand retirement savings following George Osbourne’s decision to scrap the need to buy an annuity.

On a better note, it was revealed that 24 percent of workers (7.3 million) plan to start saving or increase their pension contributions in light of the new changes.

Ros Altmann stated that a ‘national wealth service’ should be established in order to help savers understand the new pension system and make adequate plans for their retirement. She is also urging the government to put new rules in place that compel ‘non-advice’ services to disclose their charges upfront.