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What happens if you have no pension left?

Blacktower Financial Management Retirement AdviceMany of you will have read the articles extolling the virtues of the new pension freedoms introduced last April. Indeed, the new freedoms are good in that they don’t mean that pensioners are forced into poor value for money annuity schemes. For some though, the temptation to spend, spend, spend, will be too much and what happens to them?

Type of Pensions – Jargon Buster by Laura Mann Regional Manager Canary Islands

Blacktower FM - Costa Blanca - PensionsAs you already know there are a substantial number of pension types available.  How we came to have them, or what they actually are, still remains a mystery to many of us since these were thrust upon us (to some extent) by well meaning employers way back when.  This week we´re going to bust the Pension Jargon for the types of Pensions available.

Cash Balance Pension

A Cash Balance Pension is a pension arrangement, where your employer promises you a pension pot of a specified amount, when you reach retirement age.  Typically, the amount is calculated as a proportion of your salary for each year of service.  You know how much your pot will be, but there is no promise as to the amount of pension you will be able to buy (or take) from it.

UK inflation rate falls – Good news?

Blacktower FM - LondonSo, the Spanish inflation rate is currently running at – 0.9%.  Good news you might think, if things are cheaper your money will go further. Conversely, the fall in inflation reported last week in the UK (CPI) of -0.1% does not represent good news.

The vast majority of British ex-pats in Spain rely on their pensions and savings income to get by on.

So why should you care about the rate of inflation in the UK?  It might well be good for people who work there, as wages show some signs of growth but not so good for pensioners.

What have you done with your pension money?

BlacktowerFM - Euro PensionsIf you are thinking of cashing in your UK pension or have already done so, what will you be doing with the money?

An in-depth independent survey of Royal London customer behavior reveals a significant number of people, over 26%, have or plan to leave their pension savings languishing in low interest rate bank accounts. This means people run the risk of running out of money too soon and seeing their money dwindle away through poor rates of return.

Bull, Bear – who is pulling the strings?

Blacktower Financial Management - Bull or BearFor those of you who have been invested in equities and commodities, the recent few weeks will have been a stressful time. As always we are bombarded with comment after comment; opinion after opinion and ultimately who is to blame for what?

One minute it is down to Interest Rates in the US the next its China and lower growth expectations. Oil has continued to fall and Gold doesn’t seem to be doing a great deal – the normal sign of a ‘Bear’ market is a rush to Gold….which has not happened.

Will your income be cut by the new dividend tax?

Blacktower Financial Management TaxMany ex-pats are still suffering from the cuts in income that have taken place due to the very low interest rates they continue to endure on their savings.

Well brace yourselves for more!  Any of you who rely on dividends from shareholdings to supplement your income are about to see a whole new look to the tax regime associated with them.

Dividends are annual cash payments made to holders of certain shares, they provide a vital source of income to many pensioners who rely on savings in retirement. The way dividends are to be taxed is to change from April 2016 and will see basic-rate taxpayers subject to a new levy of up to 7.5 per cent.

Pensions Update – by Laura Mann, Regional Manager Canary Islands

Blacktower FM PensionsStill wondering whether to leave your pension in the UK, or move it so that you benefit tax wise as an ex-pat?  Here´s the latest update on what´s happening in the pensions world.

UK:

If you Pension Fund is still held within the UK, since April 2015 most, but not all, Pension Providers have introduced flexibility, in terms of access to Pension Funds within the UK and this is certainly proving to be very popular with many.  Depending on the size of your pot you may be able to access all tax free, or alternatively access 25% tax free at the age of 55 years.

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