Lowes Magazine Issue 116

RETIREMENT

Retirement - what if it’s not right for you?

FOR MANY PEOPLE THEIR WORKING LIFE IS AIMED AT A set retirement point, at which time they envisage giving up work completely and using their retirement pots – ideally a combination of pension(s), investments and savings – to fund a work-free lifestyle. However, in recent years the view on retirement has been changing. Not everyone wants that cut off point; some people prefer to stay active through work beyond retirement age, maybe reducing their hours or going part time, while they make that transition between work and full-time retirement. In fact, there is medical evidence that suggests a cliff-edge retirement date may not be healthy for us if work has been the main driver in our lives. Those who move best into retirement often have enjoyed a healthy balance between work, family and social lifestyle and simply shift that balance in early retirement years. While the State Pension Age is currently 66 years, rising to 67 in 2028, do you have to retire at that age? The simple answer to this is ‘No’. Nor do you have to draw your State Pension at that time. In the past companies were able to force their employees to retire at age 65 the ‘Default Retirement Age’ but this was phased out in 2011 following a campaign by Age UK. Some specific roles, for example police officers, have a compulsory retirement age, but there is no law that states at what age you must retire. Employers that continue to employ older workers can benefit from an individual’s experience and expertise that would otherwise be lost to the business. As well as keeping mentally and/or physically active, there can be financial advantages to staying in work – paying more into a pension and delaying drawing pension income in order to grow a pension pot being one benefit. An important point to note here is that as soon as you draw income from a pension your ability to pay into that or another pension going forward can be limited, from £40,000 to £4,000 a year. So, for example, someone who draws from one pension but continues working and becomes a member in the firm’s auto enrolment scheme, is limited to paying £4,000 a year and will incur tax charges by going above that. Hence, it can pay to seek financial advice around pensions and

Keeping your data safe WE REMIND OUR CLIENTS TO BE VIGILANT AGAINST scammers, particularly while the coronavirus situation persists. Research by Aegon has revealed that over 11 million people say they have had contact from scammers while three million have fallen victim to scams. Many millions of pounds in losses have been recorded by the national fraud reporting centre relating just to Coronavirus scams. Pensions are a key target for fraudsters – a cold call about transferring your pensions (now illegal in the UK) or an online approach, offering free pension advice or review, early access to a pension, an investment with guaranteed high returns, as well as pressure from the caller to make a decision, are key indicators of a scam. Other ways scammers obtain people’s financial details include phishing (emails purporting to be from valid companies asking for personal and financial details) and building convincing websites. Recent examples include emails seemingly from the government offering grants, fake NHS Test & Trace emails, and fake DVLA and TV Licensing emails. Criminals are becoming ever more resourceful. Our advice is to be wary of any approaches you are not expecting. Certainly, never give out personal details, especially financial information. We would also warn against sending personal and confidential information by unsecure email. Keep your data safe. If you do find yourself on the end of a suspect phone call, it is important to remember that you are in control. Don’t be pressured into taking action of any kind. These are ruthless people who care only about stealing your money. And should you think an investment or savings offer is genuine, please contact Lowes first before committing yourself to any transaction.

tax when working post retirement age. You can check your State Pension Age at: www.gov.uk/state-pension-age.

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