This does not constitute advice. Professional advice should be taken prior to acting on any part of it.
Dental and Medical Financial Services Limited is an appointed representative of Best Practice IFA Group Limited, which is authorised and regulated by the Financial Conduct Authority.
As a healthcare professional – whether you’re a doctor, or another health practitioner – managing your pension effectively is crucial for securing your financial future. With the ever-changing landscape of pension schemes and the ongoing increases in the state pension age, it’s vital to stay informed and proactive about your retirement planning.
State Pension Age
Currently, in the UK, the state pension age is set at 66, with plans to gradually rise to 67 by 2028 and potentially to 68 between 2037 and 2039. It’s important to note that you are not obligated to take your state pension as soon as you reach the state pension age. You do have the option to defer it, which can lead to significant financial benefits.
Deferring your pension
When you defer your state pension, your pension amount increases for every week you delay claiming it (provided the deferral lasts at least nine weeks). The increase is approximately 1% for every nine weeks, amounting to just under 5.8% per year. For instance, deferring for a year could raise your weekly payment by more than £11.82 – an attractive boost when compared to the standard amount.
Managing multiple pensions
If you’ve worked for various employers throughout your career, you might have a few pensions from different providers to manage. For busy healthcare professionals, it can be hard to track and manage it all.
To simplify your retirement savings, consider consolidating your pensions into one, allowing you to streamline your retirement planning, reduce the number of provider fees you pay, and significantly ease the management of your retirement savings.
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Consolidating your pensions
If you have amassed several small pension pots over the years, keeping track of these accounts is crucial. Unfortunately, studies show that individuals might not think about their pensions until retirement is nearly upon them. At that point, finding and consolidating these pots can be cumbersome and confusing.
The UK government is looking to roll out a Pensions Dashboard to help individuals view their pensions in one place, but until that becomes widely available, the responsibility is on you to manage your savings. Engaging with a financial adviser can be invaluable when considering consolidation. They can help evaluate the benefits and possible drawbacks of combining your pensions, ensuring you don’t lose valuable benefits associated with individual schemes.
Make informed decisions
As you navigate your pension planning, staying informed about your options is crucial. Ensure that you’re up to date with your contact information on all pension accounts, take full advantage of any employer contributions, and explore potential tax benefits.
Deciding whether to defer your pension or consolidate your pension pots is not a task to be taken lightly. Each option comes with its own set of considerations that will affect your overall retirement strategy. But taking control of your pensions allows you to craft a future that aligns with your long-term financial goals and provides peace of mind as you focus on your demanding healthcare career.
Get help managing your pensions
Managing your pensions as a healthcare professional is an essential aspect of maintaining financial health. By understanding state pension options, considering consolidation, and staying engaged with your retirement savings strategy, you can ensure a secure and comfortable future.
For assistance managing your pensions, contact expert financial advisors. Get in touch with Dental & Medical Financial Services to make sure your pension plans are on track for the retirement you want.
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