Pensions can be your pandemic lifeline for over 55s
Apr 28, 2020
For many people aged over 55, pensions are becoming an unexpected lifeline during the Covid-19 pandemic. As financial pressures grow, many of you are asking ‘can I retire or semi-retire early’, ‘what are my pension options’ or ‘can I get my tax-free lump sum cash?’
The pension freedom rules, introduced in 2015, have enabled over 55s to access their retirement money in much easier and more flexible ways. This has provided welcome timely access to their money for many, but it could now become a crucial haven from financial difficulties caused by the pandemic.
Over the next few months, many people – whether employed, self-employed or small business owners – will start to feel the financial pain of furloughing, redundancy, falling business revenues or even company closures.
But if you have built enough assets over your lifetime – as many have – pension schemes could now help you meet financial challenges without jeopardising long-term security.
Get the right advice
Pensions can still be a complex area. You may feel unclear about whether you have enough to retire or semi-retire; if so on how much; or what are the tax and longer-term financial implications?
You might think taking flexible drawdown or your tax-free lump sum could be enough to tide you over, but are scared it could dent your long-term retirement income.
When using pension freedoms, it is important to take advice to make sure you understand all the options and their implications for you. We strongly recommend using a chartered financial planning firm such as Goodmans.
As well as providing professional, holistic advice, Goodmans Financial Planning will conduct a comprehensive cashflow planning analysis.
If your plan involves taking a pension income or lump sum, we can also help you set a solid investment strategy that allows you to draw down the money without jeopardising your long-term security.
We strongly advise against simply grabbing tax-free cash without a proper plan, as some unscrupulous advisers might encourage. Goodmans will conduct a thorough review of all your finances to establish the most sensible course of action. Running a long-term cashflow model will also help make sure you can visualise and are comfortable with the range of potential scenarios and outcomes from now until death.
Clients regularly leave our meetings feeling astonished because, with the help of our cashflow models, they can see their financial future clearly and objectively for the first time. These tools are just as valuable in helping you assess a challenging financial situation as they are in calmer economic times.
During the lockdown, we are holding meetings with new and existing clients over Zoom, which allows us to share cashflow charts and other information onscreen. Even on a small remote device, these charts – combined with our advice – still have a powerful impact for anyone reassessing their finances.
A challenging and worrying situation might prompt you to ask a question about pensions options. But thanks to our holistic process, it can bring much reassurance and often lead to richer and more fulfilling conversations about your longer-term goals.
Contact us for a free, no-obligation planning session.