The Hidden Costs of Retirement

Reflections on the Budget 2017: personal tax allowance and how it could affect your pension

Chancellor Phillip Hammond set out his new 2017 Budget for the UK  yesterday, including an announcement that the personal tax allowance in the form of tax-free dividends will be reduced from £5,000 to £2,000 from April 2018.

Whilst many of those in retirement may not consider themselves investors, investing to receive an income through dividends can be a core part of a personal pension plan.

One of the most frequent questions our Wealth Planners are asked is: “How do I ensure I have an adequate Income in retirement?”, “How should I take my pension benefits?” and “How can I make my savings last?”. Very often the answer is a holistic approach that includes creating a well-structured financial plan and appropriately placed investments to meet that plan.

From April 2018, those planning their pension, and presently investing for an income to support a comfortable retirement, should be looking even more to tax efficient methods to maximise their savings and investments in life after work.

Understand and plan for the costs so you can retire comfortably

Hammond’s 2017 Budget and its focus on the cost of social care also served as a reminder of the potential costs that many of us find easier not to consider when planning our retirements. It has never been more important for those building their lifetime savings to think candidly and thoroughly about the resources they might need in retirement.

Whether you are approaching retirement or just beginning to think about life after work, creating a plan now could be one of the most valuable actions you take. To speak to one of our independent Wealth Planners for advise on how to plan for a comfortable retirement and discuss the variety of options available to you, please do contact us.

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Alternatively, below you are welcome to watch one of our educational and informative videos by Tim Bennett, discussing the ways in which you can make your money last in retirement. For more videos on the subject of retirement and pension planning, you can access the full Killik Explains library here – explore the Tax Effective Saving chapter.