Recently, Armstrong Watson undertook a survey of family businesses across the UK and most have a clear focus – providing a good lifestyle for their close family members.
Armstrong Watson are committed to supporting and advising these businesses and our Financial Planning Consultants can work in tandem with business owners to ensure that they protect the business and the people in it, whilst also supporting their plans to achieve the retirement they desire.
Whilst it may be difficult for some owners to imagine, retiring from the business is an event that requires some planning. Below are the responses from those surveyed when asked what the primary source of funding their retirement was expected to be:
- 35% Pension savings
- 18% Continued fund extraction from the business
- 16% Proceeds from business sale
- 14% Don’t know
- 13% Personal savings
- 2% Rental portfolios
- 2% Combination of options
Pensions are the most traditional method of saving for retirement, yet almost two thirds of respondents are not relying on them to fund their retirement. Is this because they haven’t saved enough money to retire on, or simply that they have not made sufficient plans upon which they can rely?
41% of respondents said that their pension savings will be sufficient to provide them with a comfortable retirement, but what about those who don’t agree or don’t know? This could be the time to seek some professional financial advice, so that you can create a plan to ensure that you can achieve the retirement lifestyle you aspire to.
Following the introduction of Auto Enrolment in 2012, millions of people are accumulating savings through employer funded pensions, so reliance on this method may well rise over time, but as mandatory contribution levels are somewhat modest, many people may unwittingly assume that this is sufficient, whereas reality may be completely different. Pensions may be a boring subject for many folk, but the concept is simple – the more you save the more you can look forward to in retirement.
Finally, new rules over what happens to your pension on death were introduced in 2015, but not all providers can support the changes. These rules can be very useful for those undertaking inheritance tax planning, but many pension schemes haven’t been updated as the flexible rules aren’t mandatory. Some providers may not have the operational functionality to accommodate the changes, while others may simply choose not to adopt them so it’s important to review any existing arrangements you hold.
Contact our Financial Planning Consultants at an office near you or call 0808 144 5575.