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Pension Release In The UK – Making The Right Decisions

Read About Pension Release In The UK

Later life planning, including pension release is a decision process that has far reaching consequences, both for our retirement and for our loved ones after our death. It is imperative that the decision making process for retirement planning is undertaken in a well researched and well informed manner. Particular emphasis should be put on the legal and financial ramifications of each decision, as they may have a long term inter generational impact.

Pension Release

The UK Government announced in its Budget 2014 statement that as of from April 6th 2015, persons aged 55 and older will be able to access their pension reserve funds, in order to consider pension release, subject to the marginal rate of tax. Pension release brings greater flexibility granted by the state, which increases the flexibility of the income draw down rules by removing the maximum ‘cap’ on withdrawal. Pension release also sets out minimum income requirements for all new draw down funds since 6th April 2015. It also enables pension schemes to make payments directly from pension savings with 25 per cent taken tax-free (in place of a tax-free lump sum); and it removes some prior restrictions on lifetime annuity payments.

Prepaid Funeral Plans

As well as retirement planning, prepaid funeral plans are an essential component of later life planning. Savers can reduce burdens on their grieving loved ones by carefully comparing and contrasting from an available variety of UK prepaid funeral plans. Even if you are in peak physical condition and in the “prime of life”, it is always prudent to put in place a prepaid funeral plan to avoid your loved ones having to deal with such funeral related costs as solicitor fees, cremation or burial expenses, florist and funeral director charges, which can be an unpleasant surprise to a family in the time of their grief. Details regarding prepaid funeral plans can be obtained by following the links within this website.

Estate Planning

It could be argued that making a will is almost as essential as a prepaid funeral plan. The orderly disposal and dispersal of your possessions and estate can be arranged years in advance, with appropriate legal advice and careful estate planning. A legally binding will ensures that your estate will go to the people and charitable organisations or causes that you care most about. Family unity can be maintained by a will that shuts off the likelihood of disputes among relatives, regarding portions of the deceased’s estate. Ensuring that the deceased’s belongings can be passed down to subsequent generations. Making a will can also be tax advantageous to the beneficiaries of the will. It ensures that your funeral will be conducted in accordance with your explicit stipulations, according to your ethical or religious preferences. Further information regarding wills can be found on our website.

Living Wills

Recent years have seen an increase in the use of “living wills”. These documents indicate what manner of treatment you wish for in the case of severe or terminal illness, or what treatments and medicines you would refuse. In the event that adverse circumstances render you incapable of passing such instructions onto your healthcare professional service provider, the instructions stipulated in a living will are available to inform the care providers. However, unlike wills regarding the disposal of property and estate planning, advance statements in living wills are not legally binding on the treatment providers. However, advance decisions regarding refusal of end of life treatment must be stipulated in writing and signed by yourself and a witness and must explicitly specify the treatment you wish to refuse.

Lasting Power Of Attorney

Lasting Power of Attorney (LPA) is another vital legal component of end of life planning. Arranging LPA’s does not necessarily mean appointing a solicitor, rather arranging LPA’s gives a designated individual the authority to look after your personal and financial affairs in case of physical or mental adversity rendering you incapable of dealing with such matters yourself.

Life Insurance

Life insurance is another key component in arranging family protection after your death. Policies can vary from options like whole life insurance, mortgage cover and level term life insurance. Whole life insurance policies pay out a fixed sum of money when you die, regardless of when death occurs. It is contingent on the policy holder continuing to pay their monthly payments, but customers should be advised that whole of life insurance policies are more expensive than their “level term” counterparts, due to the eventual certainty of a pay out. Level Term life insurance, in contrast with whole life policies, only pays out if you die within a specified number of years, or the “term” of the policy, with the payout amount specified in advance in accordance with your needs. A more common form of a family protection policy is mortgage life insurance, also known as “decreasing” life insurance. This policy pays out an amount that reduces over time, usually arranged in tandem with a mortgage or another long term financial liability that reduces over time as repayments are made. As a result of the incremental reduction, these plans would tend to be cheaper over time than the aforementioned whole of life and level term policies.

In conclusion, decisions regarding end of life planning can be difficult to make for emotional reasons, but careful planning can ensure you have made adequate provision for your loved ones, which can be a source of solace to them, even in their grief. Our website contains more in depth information about pension release, prepaid funeral plans comparisons and all of the topics discussed in this article – Following the links or go to the compare funeral plans UK website homepage and from there, you can navigate to much more information on each of the topics.

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