This year, summer brings hope of a better financial future as inflationary pressures recede and the economy continues to grow. It could therefore be an ideal opportunity to prioritise a range of pension-related issues in order to ensure brighter days do lie ahead. 

Pension withdrawals up 

Many people have faced significant financial challenges over the last few years. Recently released Financial Conduct Authority data covering 2022/23 highlights these difficulties, with the number of pension plans accessed for the first time up by 5%. However, as recent challenges begin to ease, it is hoped that, rather than dipping into pension savings, people’s focus will increasingly return to boosting their retirement pots and sorting out other pension-related concerns. 

Expression of wishes 

One pertinent issue relates to inheritance, with research¹ showing that almost half of all UK pension savers have not considered who will inherit or otherwise benefit from their retirement savings. Since April’s Lifetime Allowance changes, decisions around pension beneficiaries have become more vital due to the way such pensions are taxed on receipt. It is therefore extremely worrying that the research also found over half of respondents had not completed an expression of wishes form, with a further one in ten unaware if their forms were up to date. 

Taxing issues 

Most people appreciate the tax advantages associated with pension contributions, but what is often less well-known is their potential to pass on wealth tax-efficiently. This means pensions can play an important role in supporting loved ones after you pass away. Pensions can also be advantageously used to navigate the Child Benefit trap, as pension contributions reduce taxable income and can thereby enable some people to avoid paying the Child Benefit Charge. 

Pension conversations 

We all appreciate the importance of devoting time to our pension arrangements now to ensure we reap the benefits later. If you need help with any retirement-related issues, we can talk through your options and make sure you are maximising your pension benefits. 

¹Canada Life, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.