Andy Zanelli, head of retirement planning, AXA Wealth, comments on the Chancellor’s Autumn Statement
“With the Chancellor’s latest changes to the pension regime in the UK announced today, it would seem that not even death and taxes are certain anymore.
“Today’s changes bring the treatment of joint life annuity payments into line with the abolition of the 55 per cent death tax announced at the Conservative Party Conference in September and mark the latest in a line of reforms to bring greater flexibility to pension savings in the UK.
“Giving savers greater choice in the way they use their pension pots is a positive step and we welcome the additional flexibility the new rules will bring in April. We know one of the best ways to encourage people to save for the long-term is to remove as many barriers as we can. However, planning your finances for retirement can be incredibly complex. With the opportunity to earn additional income diminished, there is an increased focus on ensuring financial plans factor in enough money to pay for the essentials, allow some money to do the things you want, while guaranteeing your money doesn’t run out before you die.
“As a result of the steadily decreasing lifetime allowance we have seen in recent years, an anticipated increase in the number of products to meet retirement needs and a complicated tax regime, professional financial advice has never been more key. While the guidance guarantee offers a good first step on the road to financial advice, it is not going to be a silver bullet and more engagement in financial planning is needed.
“Both advisers and their clients should take a moment to think about their financial goals and whether their current savings plan allows them to be met. Whatever route people take, it is important that they are engaged and proactive in the planning process as the decisions they make today will directly affect the life they can live tomorrow and beyond.”
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