No matter how on top of things you are, there are some events that happen in life that you have no control over. However, it can have serious implications on your wellbeing as well as your finances. If you have pensions, especially such events can have an impact on how your pot is growing.
Having said that, leading pension providers Portafina have expert advice regarding 7 life events and how they may affect your pensions.
Moving abroad is something people choose to do for different reasons. However, when you move at retirement age, this can affect your pensions as accessing it while abroad can be tough and you may not be eligible for tax relief. However, there could be restrictions on what you can do so getting a clear understanding of your options is important for adequate financial planning.
Most people don’t hope to die unexpectedly or before their time, but it’s important to know what will happen to your pensions if you do. One possibility is that your money could be passed on to friends, family, relatives, or a charity of your choice.
Being Made Redundant
A job is most people’s livelihood, so losing it can be devastating. You should rest assured that if such happens, your workplace pensions still exist and all is not lost. This means you can continue growing your pot on your own, but you just won’t get employer contributions. Alternatively, you could inquire about transferring that scheme to a new employer or to a standalone personal pension.
Another unfortunate life event that could shake up your pensions is getting a divorce. When you marry someone, your lives are often intertwined so if you end up needing a financial settlement, your pensions could be threatened. In that regard, the good news is that there are options like pension sharing or offsetting which is where the value of the pensions is offset against other assets.
For most pension plans you aren’t able to access them until you reach close to retirement age. The exception to the rule, however, is usually that if you happen to have a serious illness you can have access to a portion or all of your funds before the set age. When it comes to state pensions, however, this exception doesn’t stand.
Finding a New Job
Like losing a job, getting a new one can also affect your pensions. If you’re 22 or older and your salary is over £10,000, then it is required that you have to be enrolled in a new workplace pension scheme by your new employer. Both you and your employer will need to pay the minimum contribution of 8% as at 2019 and there’s a possibility that you could merge your old pot with your new one. Nevertheless, if you want to know about any new pension development, follow Portafina’s Facebook page.
Seeing as your pensions aren’t classed as an asset, if you’re bankrupt you have very little to worry about regarding your pensions. With that being said, if you do enter bankruptcy, there are rules and regulations about how you can continue to save into and access your funds so get the right information.
If you have any questions or would like to find out more you can visit Portafina Discovery a handy resource hub. They also have lots of information on their social channels, YouTube and @Portafina UK on LinkdIn.