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Final salary pensions – why now is a good time to cash in

So instead of waiting until she was 60 (over 10 years away) for a guaranteed annual pension of £15,000, Mrs Dee decided to transfer out of her final salary scheme and move the £600,000 (40 times her £15,000 guaranteed annual pension) to a QROPS.

Why did she transfer from her final salary scheme?

Mrs Dee’s main reasoning was that she wanted the flexibility to be able to leave her pension to whomever she wanted after her death – her children and husband. Under the final salary scheme her husband would have received just half of the £15,000pa. When she reached 55, Mrs Dee also wanted to be able to access her pension, if required, and to be able to take out varying amounts if and when she wanted. This was made possible by cashing in her final salary pensions.

The demand for transferring workplace pensions into private arrangements has shot up since new pension freedoms were introduced two years ago, and the temptation to switch has grown in the last year as final salary pension transfer values have soared to record levels.

The reason pension transfer values have soared is because rock bottom interest rates and gilt yields mean Pension Members are being offered a multiple of their promised income at retirement. This is usually between 20 and 25 times, but since the vote for Brexit, multiples of 30 or above are not untypical.

These record transfer values will not last if interest rates rise

Act now and you too can take advantage. Before you start taking your pension, speak to Blacktower. Opportunities like this don’t come along more than once in a lifetime!

Disclaimer: The above information was correct at the time of preparation and does not constitute investment advice. You should seek advice from a professional regulated adviser before embarking on any financial planning activity.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

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Tops Tips to Avoid Pension Transfer Scamming

Stop message painted on roadThe Pensions Regulator (TPR) has recently acknowledged that pension scammers are being caught out and hindered by action from the government, regulators, the Work and Pensions Committee, and the wider industry, but added that vigilance is still needed.

On 22 May, speaking at the Association of Member-Directed Pension Schemes’ conference, TPR’s Anthony Raymond said that the plan to ban cold-calling is a welcome step-forward in protecting consumers, and that a recent High Court ruling, which saw four scammers ordered to repay £13.7million they had swindled from 245 victims, sent a clear message to fraudsters.

However, while this court action to regain funds for scam victims is brilliant news, the recommendations for pension savers are clear: stay aware of fraudulent activity and seek independent, regulated pensions advice before signing anything.

Blacktower’s top tips for scuppering the scammers

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Modelo 720 (Overseas Asset Declaration) It’s that time of year again

Spanish FlagIf you are resident in Spain (if you live here more than 183 days in a calendar year, the Spanish tax authorities and in turn the UK HMRC will class you as Spanish resident) and held assets outside Spain as at 29 December 2017 worth over Euro 50,000, and you haven’t already declared them on a Modelo 720, you need to so by the end of March.

You may ask why should you bother, well unless you want a huge fine and possibly tax audit (they can legally go back to 2012) it is in your best interests to do it.

Some of you may still be under the impression that the reporting of assets is not a legal requirement; if this is the case then sadly I have to tell you, you are mistaken. On 15 February 2017, the European Commission accepted that Spain has the right to require residents to declare overseas assets. While the Commission disagrees with the severity of punishments for late or inaccurate submissions, the requirement to submit the Modelo 720 form is not under challenge. The EU and the UK say it is a legal requirement.

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