Nest presentation 2015
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Transcript of Nest presentation 2015
Retirement – Sources of Income
Retirement Income
State Pension Benefits
Pension Funds
Other savings/income
Saving for retirement – essential questions
1. What if I don’t save for retirement?
2. When do I want to retire?
3. How do I want to live in retirement?
4. Will I be able to retire?
5. Can I, and do I want to save for retirement?
When? Male or female When were you born No earlier than State Pension Age
How much? Number of years you have paid National Insurance Contributions
(NIC)
www.gov.uk/calculate-state-pension
Key questions and where to get the answersState Pension Benefits
Alzheimer Scotland NEST Pension Plan
Benefits – When & What?
Contributions – How much?
Investment – Which fund(s)?
Benefits - When?
Earliest date you can take your Alzheimer Scotland Pension Plan benefits:
Currently age 55 Increasing to 57 from 2028 Thereafter, no earlier than 10 years before State Pension Age
Selected Retirement Date You choose – if not, default dare is your State Pension Age Annual Plan statement benefits projection Sets date for Retirement Date Fund investments
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Benefits – What?
Your Alzheimer Scotland Pension Fund
Cash 25% tax -free
+ Pension
Cash 25% tax-free + 75%
taxable
Drawdown – each payment 25% tax-free, 75% taxable
Pension
Cash -25% tax-free +
taxable drawdown
Contributions - How it works?
NEST
Employer Contribution
Employee Contributions
(x80%)
Tax Relief (20%)
Contribution Structure
Employer Contribution
Employee Contributions
(x80%)
Tax Relief (20%)
Dates Employer Contribution (% of qualifying
earnings)Your Minimum
Contribution (% of qualifying earnings)
Enrolment date to 30 September 2017 1% 1%
1 October 2017 – 30 September 2018 2% 3%
1 October 2018 onwards 3% 5%
Qualifying Earnings - All monthly earnings between £486 and £3,532 (2015/16 tax year)
Your Contributions – How tax-relief works
Net Pay
Gross Pay £1,000Tax £23.33NI £39.40
Employee pension contribution (Qualifying earnings = £1,000 - £486 = £514 x 1% X 80%)
£4.11
Net Pay £933.16Employee pension contribution £4.11Tax relief 20% added by NEST £1.03Employer pension contribution + £5.14
Total pension contribution £10.28
Example: Earns £1,000 per month with 1% contribution of qualifying earnings
Higher tax payers claim relief through self assessment + Employer contribution is 1% of qualifying earningsBased on tax and NI rates for the 2015/16 tax year
Key questions and planning support
1. When - Am I saving enough?
2. Lifestyle - Am I saving enough?
3. Ability - Am I saving enough?
4. Capability – Can I/will I save enough?
Investment - Options
1. Default Investment Option NEST Retirement Date Fund. Based on your State Pension Age (or your selected NEST retirement date)
2. Select your own funds Five alternative funds available from NEST
Investment – Plan Default OptionThe Retirement Date funds work in three phases:
Phase Objectives Years to Selected Retirement Age (approximate)
Foundation • Preserve fund value and keep pace with inflation• Reduce likelihood of extreme investment shocks• Target long-term volatility average of 7%
>40
Growth • Target investment returns of inflation + 3%, net of charges
• Take sufficient investment risks whilst reducing likelihood of extreme investment shocks
• Target long-term volatility average of 10-12%
<40 >10
Consolidation • Gradual move to annuity-tracking and cash like investments
• Reduce likelihood of investment shocks• Reduce volatility
<10
Investment – Alternative funds you can choose
Fund Anticipated Volatility Range
Lower Growth Fund 0 – 0.5%
Pre-Retirement Fund 2 – 5%
Ethical Fund 10 – 15%
Sharia Fund 15 – 25%
Higher Risk Fund 15 – 25%
Investment & Administration – NEST Online Services
Access individual account details and update View contributions Valuation of your policy Switch funds Update nominated beneficiaries
Registration process:
https://www.nestpensions.org.uk/schemeweb/NestWeb/faces/secure/USER_REG/pages/activateYourAccount.xhtml
Follow online instructions
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Planning For Your Retirement – Summary Considerations
www.gov.uk/calculate-state-pension
Individual annual benefit statement
Previous employers pension schemes or individual pension policies www.pensiontracingservice.com
Other savings and/or income available on retirement ?
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State Pension Benefits
Your Alzheimer Scotland
Pension Fund
Other Pension Funds
Other Savings/Income
What happens if….I die before taking my retirement benefits?
Your fund returned to your nominated beneficiary(ies) as a tax free lump sum
Update nominated beneficiary via NEST online access, or complete the return nomination form included in Welcome Pack from NEST
No completed nomination – NEST normally pay your fund to person looking after your financial affairs on death
Change of personal circumstances/nomination - Inform NEST to ensure your funds are distributed in line with your wishes.
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What happens if….I leave Alzheimer Scotland?
Options available:
1. Continue to make personal contributions to the Plan (minimum £10 each time)
2. Suspend contributions and restart later
3. Make no further contributions and leave funds invested until you take benefits
You will not be entitled to a refund of contributions if you leave the Plan. You are currently unable to transfer your fund elsewhere unless aged 55 or over (to be removed 1 April 2017).
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Life Assurance Insurer AvivaWhen am I eligible? All permanent employees aged 16 – 75When can I join? On commencement of employmentHow do I join? Automatically includedWhat do I pay? Nothing, full cost met by Alzheimer ScotlandBenefit Lump sum = 3 x your earnings (before salary exchange) subject
to a minimum of £5,000Contract workers – annual basic salarySeasonal – total earnings declared in tax year before death
When is it paid? In the event of your death as a permanent employee of Alzheimer Scotland
Who is this paid to? Your nominated beneficiaries, at Trustees discretion
Is this a taxable benefit? No, exempt from Inheritance Tax
When does cover cease? Earlier of employment ceasing with Alzheimer Scotland or attainment of age 75
Life Assurance – Nominating Your Beneficiaries
Trustees – Alzheimer Scotland
Trustees discretion to whom benefit payable = exempt from Inheritance Tax
Nomination Form available from Trustees
Completion supports payment of benefits with minimum delays
Complete updated form if circumstances/wishes change
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Disclaimer
The contents of this presentation are confidential and not for onward distribution. Disclosure to third parties cannot be made without the prior written consent of Mazars Employee Benefits Limited.
The information presented does not constitute advice.
It is based on our current interpretation of UK legislation and HMRC practice at the date of production. This may be subject to change in the future and any tax rates or reliefs may be altered. Professional advice should be sought prior to making any decision and Mazars Employee Benefits Limited will not accept responsibility for decisions taken solely on the basis of the information presented. Some services offered by Mazars Employee Benefits Limited are not regulated by the Financial Conduct Authority.
Mazars Employee Benefits Limited is an Appointed Representative of Mazars Financial Planning Limited which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No. 03893679 with its registered office at Tower Bridge House, St Katharine’s Way, London, E1W 1DD.
Mazars Employee Benefits Limited and Mazars Financial Planning Limited are both wholly owned subsidiaries of Mazars LLP, the UK firm of Mazars, an integrated international advisory and accountancy organisation