FAQ’S
Frequently asked questions and answers!
FAQ’S on pensions
At what age can I start drawing my pension?
From age 55.
Do I pay tax when I draw my pension?
The first 25% is tax free and the rest is taxable at your rate of tax, so if you do not pay tax there would be none to pay up to your personal allowance, if you are a basic or higher rate tax payer then your pension would have tax deducted.
What options do I have with my pension?
You have several options with your pension including:
- Leave your pension untouched to grow further
- Cash in your entire pension
- Withdraw smaller lump sums or income
- Enter flexible pension drawdown/withdrawal
- Buy an annuity – (a guaranteed income for life)
For further information on pension options click the following link – Pension Options
What is a defined-contribution pension?
This is the most common type of pension and is very often a workplace pension provided by your employer. When you reach your chosen retirement age, the size of your pension pot will depend on how much you, and your employer have paid in, how the funds in which your pension savings have been invested in have performed, and the tax relief your employer has added to your pot on your behalf.
What is a defined-benefits pension?
A pension scheme, run, paid for and sponsored by an employer. Instead of each member having their own “pot of money”, for each year you worked at the company, you accrued a future promise of income which was expressed as a % of your (as yet unknown) final salary when you ultimately leave. It is your ex-employers responsibility to pay your income for the rest of your life and is therefore considered very secure (you have no investment risk).
What is Annuity?
Annuity is where a client “gives away” their pension funds in return for a guaranteed income for life. If they die sooner the lump sum is lost, if they die later they will receive the income for life and possibly way more than the lump sum used.
What are GAD Rates?
GAD Rates are published by the Government Actuary Department and are used in the calculation of potential withdrawals in a Capped drawdown plan. They normally use FTSE 15 year gilt yields and members can then withdraw between 0 and 150% of the published GAD rate.
How does the process work?
Here at Financial Fortress we have decades of experience allowing us to tailor the whole process around you. Generally speaking, our financial planning process can be broken down into five easy steps and is usually completed over 2 meetings. Here’s what to expect – Our Process
FQA’S on mortgages
What is a ERC?
An ERC (early repayment charge) is a charge that can occur if you pay off your loan or switch your mortgage within a certain time period.
What is a LISA?
A LISA (Lifetime Isa) helps people save for their first home or retirement. If you put money in the LISA , the government will give you a bonus worth 25% of what you pay in up to a set limit every year. Currently you can put up to £4000 in every tax year. The government will give you a bonus of £1000 every tax year assuming you put in £4000.
The LISA has no minimum payment but does have a maximum of £4000.
- Only first time buyers can use the bonus
- Must be open one year before buying a house
- We would recommend this for first time buyers but not for retirement planning.
What is the minimum deposit Buy To Let?
You need 20% as a deposit, however we recommend getting 25% to open up most of the market which will get you better rates and products.
How many accounts do I need being self-employed?
We have lenders who will accept 1/2 and 3 years. The Majority of lenders want 2 years accounts, however we have a few lenders who will accept 1 years accounts. Please note if your a first time buyer this further complicates things, we would recommend getting in touch. – Contact Us
I have bad credit, will this be a problem?
This will not prevent you from getting a mortgage. There are a number of lenders that we work closely with who are more favourable to clients who have previously had trouble sourcing finance. Talk to one of our advisors today for further information.
How does the process work?
Here at Financial Fortress we have decades of experience allowing us to tailor the whole process around you. Generally speaking, our financial planning process can be broken down into five easy steps and is usually completed over 2 meetings. Here’s what to expect – Our Process
If you have any questions please feel free to contact us or start a live chat with one of our advisers!