Cleere Life Pensions

Personal Pensions

Your retirement may seem like a long way off, but it is never too early to start planning. Smart planning for your retirement will ensure that when you do retire you can maintain the standard of living you have become used to.

A Pension is a tax efficient way to save money by means of offering full tax relief, tax free growth and a tax free lump sum at retirement. The State Pension alone is not enough for most of us to rely on.

At Cleere Life & Pensions our team of investment experts will help you make the right decisions for your retirement. We will review all your options and help you choose a Personal Pension plan that exactly meets your needs and retirement ambitions.

What is a Personal Pension

A Personal Pension is essentially a long-term savings plan which is managed on your behalf by a life assurance company. The contributions you make to your plan are invested with the aim of building up an income for your retirement.

You can set up a Personal Pension plan if you are self-employed or if you are not entitled to join a company pension scheme.

How does a Personal Pension work?
  • You choose a pension provider and an investment fund that fits your financial needs and ambition.
  • You make regular, usually monthly, contributions to your Pension Plan over a long-term period, typically 20-35 years.
  • Your money is invested in assets such as equities, bonds, property, alternative assets and cash.
  • The value of your pension plan when you retire will depend on the amount you contribute, the performance of the fund and the charges you pay.
  • Upon retirement you can take up to 25% of your fund as a tax-free lump sum, and use the balance to provide a regular income during your retirement.
What advantages do Personal Pensions have?
  • A Personal Pension Plan is a tax-efficient way for you to save for your retirement – you will avail of generous tax reliefs on the contributions you make to your Pension Plan, typically at the highest rate of income tax you pay.
  • Any growth in the value of your pension fund is tax-free.
  • Your money is invested in assets such as equities, bonds, property, alternative assets and cash.
  • You can take up to 25% of your fund as a tax-free lump sum when you retire.
  • You will enjoy all the peace of mind that comes with knowing that your financial needs in retirement are taken care of.

Executive Pensions

If you are a company owner, director or senior executive then an Executive Pension is possibly the most tax-efficient and secure way for you to save for your retirement. An Executive Pension will also ensure you and your business maximise the generous tax advantages available.

At Cleere Life & Pensions our team of investment experts will help you establish and run an Executive Pension scheme that works best for you and your business. We will show you different ways to ensure that every taxation, operational and security opportunity of an Executive Pension is maximised to your advantage.

What is an Executive Pension?

An Executive Pension is a company pension plan set up by an employer to provide retirement benefits for directors, senior executives and employees of the company. The employer must pay some or all of the pension contributions on behalf of the director or employee. The director or employee may also contribute to the plan.

Who can set up an Executive Pension?

Any employer can set up an Executive Pension on behalf of a director or employee, even if there is only one employee in the company. This makes Executive Pensions ideally suited to small businesses and one-person limited companies. It also offers company directors a tax-efficient way of investing some or all of a company’s profits on their behalf.

How does an Executive Pension work?
  • The employer sets up an Executive Pension in trust on behalf of the employee.
  • The employer makes regular and/or lump sum contributions to the Executive Pension on behalf of the employee.
  • The employer can also add benefits such as Income Protection and Life Cover.
  • The employee can make their own regular and/or lump sum contributions in the form of Additional Voluntary Contributions

PRSAs - Personal Retirement Savings Accounts

In 2002 the Government introduced Personal Retirement Savings Accounts (PRSAs), a very flexible and attractive way of saving for retirement. Just like other forms of pensions, PRSAs come with attractive tax reliefs and offer access to a wide range of investment funds and options, so you get all the freedom to tailor your pension to your needs and circumstances. What's more, when you move from job to job your PRSA comes with you, so your retirement plans will never suffer and extra charges won't be applied.

At Cleere Life & Pensions we have extensive experience of helping people choose the PRSA that is right for them. Our PRSA advice takes into account all the flexibility your working arrangements demand, and ensures you enjoy the full tax benefits that a PRSA offers.

Who can take out a PRSA?
  • Anyone can take out a PRSA: employees, the self-employed, part-time workers and those who are unemployed.
  • You can use a PRSA as your primary pension plan but if you already have a company pension you can also set up a PRSA and use it to make Additional Voluntary Contributions (AVCs) that are separate to your company pension.
Who should set up a PRSA?
  • You should set up a PRSA if you do not have access to a company pension scheme or if you are self-employed.
  • You should set up a PRSA if you are a member of a company pension scheme but want to make separate Additional Voluntary Contributions (AVCs).
What types of PRSAs are available?
  • Standard PRSA – this type of plan comes with less freedom of choice in terms of the types of investment funds available but does have the advantage of charges being capped at 5% of contributions and 1% per annum on the asset value.
  • Non-standard PRSA – this type of plan offers a greater choice of investment funds but has no limit on the amount of charges that can be applied.

Approved Retirement Funds (ARFs)

When you retire you need to consider your options for managing the money that you have saved with your pension plan. This is where Approved Retirement Funds (ARFs) come in. An ARF allows you to continue to invest your pension fund so that it has an opportunity to grow. You can also make withdrawals from the fund as a way of providing you with a regular income in retirement.

There is a lot to consider when choosing the ARF that is best for you and here at Cleere Life & Pensions our impartial advice can make that decision a lot easier and more effective..

Who can set up an ARF?

Anyone with a defined-contribution pension plan can set up an ARF to manage their pension after they retire.

How does an ARF work?
  • When you retire you can take up to 25% of your pension as a tax-free lump sum.
  • You can then use the balance to invest in one or more ARFs.
  • Your money is invested on your behalf by a fund manager who will take into account your appetite for risk and reward when choosing appropriate investment funds.
  • When you draw down money from your ARF you become liable to PAYE income tax and levies on the money you take out.
  • You do not pay tax on the investment growth in your underlying fund.
  • When you die any remaining value in your ARF is passed on to your next-of-kin.
What is an Approved Minimum Retirement Fund (AMRF)?

An AMRF is an investment fund which gives your pension money the opportunity to grow during retirement. However, unlike an ARF you cannot access your money until you reach 75 years of age. Until then you can only draw down any growth in the fund's value. You will need to have an AMRF before you can take out an ARF.

Buy Out Bond

What is a Buy out Bond?

When leaving an employment, one of the options an employee has is to transfer their pension benefits to a Buy out Bond.

Transferring your accumulated pension fund to a Buy-out Bond has a number of benefits:

  • You have control over your pre-retirement assets.
  • You can choose where your pension fund is invested.
  • You can normally access your benefits from age 50 onwards.
How is my Buy-out Bond Invested?

Each Life Assurance company has a range of over 40 funds to choose from. You are free to choose one or a combination of these funds and you can also switch between the funds to best suit your needs at any given time.

There would also be a choice of Lifestyle Investment Strategies. Lifestyling aims to gradually reduce your exposure to risk as you get closer to retirement. The Life Assurance company will automatically start switching your Buy-out Bond to medium-risk or low-risk funds as you move closer to retirement.

What Benefits will I receive at retirement?

When you retire you will have a number of different choices as to how your pension fund can be used to provide for you and your dependants in retirement. You do not have to make these choices until you reach retirement age.

Please note that the options will be based on the prevailing Revenue rules and limits.

On retirement, you may have the following options:

  • Taking a retirement lump sum, all or part may be tax-free.
  • Buying an annuity.
  • Investing in an Approved Retirement Fund (ARF) / Approved Minimum Retirement Fund (AMRF).

Cleere Life & Pensions have a proactive approach to their work and, after each visit, they later follow up and forward a very detailed report explaining the current situation.

John & Michelle, Investment Client