Keep up to date with EasySIPP changes

If you invest in one of our EasySIPP portfolios you may want to keep up to date with changes that are made. Following a change in fund manager we have changed funds within the EasySIPPs. Details of the revised portfolios can be found here.

If you're the sort of investor that uses our EasySIPP but you don't have the time to be continuously checking your portfolio, you may like to switch into one of the new VT Chelsea Managed Funds. 

Saving for retirement

The trick with pensions is to carry on saving. When household expenses mount, it's sensible to have a bit of spare cash lying around, but try not to dip into the money you would be saving into your pension. Have a read of our compounding article to see what a difference small sums can make.

You might like to consider setting up a monthly contribution. It might be easier on the finances and by investing in this way you may help to protect yourself from some market movement and it's a good saving discipline.

But, more importantly, try and combat inflation that is already eating away at your savings by increasing the contributions each year. If you have recently received a bonus or pay increase, why not add that to your pension? If made as a personal contribution, this will benefit from tax relief as well.

Cash 

There is little to no interest on cash at the minute and, while you may be protected from the market, your savings aren't growing. They are being eaten away by charges and inflation, so you may want to invest some of the cash you hold in your pension.

If you aren't sure where to invest, you may like to find out more about our VT Chelsea Managed Funds or our EasySIPP portfolios. Remember to keep an eye on your pension to ensure it is performing the way you would expect.

Consolidate today

In most cases when you change jobs, you keep any pension pots that you have built up. So, if your employer offers a pension, it normally makes sense to join. Think twice about opting out of auto-enrolment schemes – it's effectively free money from your employer. How often does that happen?

On the other hand, it is unlikely that you will have only one employer throughout your lifetime, so it can be tricky to keep track of the different policies you hold. Consolidating all your pensions in one place can make it a lot easier to keep an eye on charges, but also where your money is invested.

Remember to check that you won't lose any guarantees or benefits by transferring, and always check if there are transfer out charges.

About to start taking your pension?

So, you have saved all your hard earned cash, you have reached 55, and you now want to take some of your pension. Below are a few things to think about:

• We will need see proof of your age, to confirm that you are 55 or over
• Think carefully about the tax implications when taking benefits. For example, if you are still receiving an income of say £30,000 and take an income of £20,000, you may be pushed into a higher tax bracket
• If you are close to the lifetime allowance, you may want to apply for fixed and personal protection. This can be done via HMRC.

When you start taking your pension, the money that isn't paid out can still be invested. But where should you be investing that money? We spoke to Darius McDermott, who gave us his thoughts:

“The adage goes, for example, that if you are 20 years of age you should hold 20% in bonds and the rest in equities. As you get older, you should switch your investments from bonds to equities and, for example, by the time you are 60, you should hold 60% in bonds and 40% in equities.

“While our investment portfolios should change a lot over the years, I feel this particular way of thinking is out of date. With fewer people now buying guaranteed-return annuities at retirement and more and more people living longer, our money needs to last longer too. And while no-one should take on any more risk than they can stomach, de-risking too much as we enter retirement could be a costly mistake.”

What will happen to my pension when I die?

Your pension can be passed on to your loved ones, tax efficiently. If you die before the age of 75, your beneficiaries can receive your pension completely tax free. If you die after the age of 75, your beneficiaries will be taxed at their maginal rate of tax.

Pensions are usually free from inheritance tax, so make sure that you have completed an expression of wish form, so that we know where you would like your pension to be passed on to.

And don't forget – Chelsea do not charge for processing probate.