You’ve worked hard for your money – now investing can get your money working harder for you
Before investing, you need to decide how much risk you are willing to take and consider your ability to deal with any losses. Some investors are happy to take higher risk if there is a chance for higher returns over the longer term, while others don’t want to accept any risk. Others may sit somewhere in the middle. The value of investments can go down as well as up, and so there is always a risk that you may not get back the amount you put in.
Convenience rather than cash is the biggest motivation
There are plenty of reasons why moving into a smaller home makes sense, and more than 3.9 million over-55 ‘empty-nesters’ approaching retirement are planning to downsize to a cheaper property later in life – but it is convenience rather than the cash that is their biggest motivation.
Whatever you’re putting money aside for, there’s likely to be a role for Individual Saving Accounts (or ‘ISAs’). Low interest rates on cash savings since the financial crisis have meant that many savers have turned to the markets in the hope of achieving a better return.
Access to health and well-being support in the workplace
There is now a clear trend of people working for longer and delaying their retirement. Although some are staying in work out of financial necessity, others want to keep working because they value the mental and social stimulation their job brings.
If you die, your Self-Invested Personal Pension benefits will be paid to your beneficiaries – either as a lump sum or an ongoing pension. You’ll need to complete a nomination form declaring who you want the payments to go to. The tax treatment of any death benefits paid from your SIPP will depend on your circumstances.
One-time purchase that affects your whole retirement
Due to the current economic climate, it has never been more important to make the correct decisions when deciding how to invest a retirement fund. If you decide an annuity is right for you, it’s important to shop around. It’s a one-time purchase that affects your whole retirement, and you cannot change your mind later on.
Guaranteeing you a regular retirement income for life
An annuity allows you to use your pension fund to buy an income from the provider of your choice. The annuity guarantees regular payments until you die. Normally, once purchased, it cannot be altered. There are different types of annuity available in the market, and you should consider the best product to suit your circumstances.
Helping you make the most of the new pension freedoms rules
Drawdown allows you to take income directly from your pension fund without the need to purchase a lifetime annuity. In turn, this allows your pension fund to remain invested in the assets of your choice whilst taking an income.
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