pension

The report will describe about factors for pension planning. Also, it will be discussed effect of retirement planning on clients before, at and after retirement (Carrino, Glaser and Avendano, 2018). Moreover, impact of tax and legislation on retirement planning will be explained. Along with it, needs of retirement planning for client is mentioned.

At present the men can claim pension at age of 65 whereas women age is rising from 60 to 62. This is done to equal both men and women age till 2018. Furthermore, there is no separate pension given to disabled people in UK. In each state pension, individual is having an access card that provide minimum guarantee of weekly income and saving card for those who are able age of 65. Alongside, pensioners receive other benefit as well like healthcare, etc.

Political, economic and social factors for pension planning

In recent times, there are many factors due to which in state pension scheme changes are made. It has resulted in making changing legislation since pat several years. Also, government is enforced to modify entire pension system. So, the factors are defined below :-

Political – it is a factor that is related to change in government, political situation, law and legislation, etc. of country. In UK there has occurred many government changes due to which laws are modified (Cribb and Emmerson, 2016 ). Along with it, there are several reforms formed in UK. The new state pension is introduced that regulate and manage overall pension. Changes in political situation or change in legislation plays a vital role in pension planning.

Economic – this is also a factor due to which there is change in pension planning. In UK the many people get pension and other benefits. In 2011 the government decided to increase state pension by CPI of 2.5%. It was known as Triple lock. This guaranteed a minimum income to pension credit card holders. Furthermore, the triple lock was implemented by analysing report of Turner 2004.

Social – In this the factors are included related to age, gender, needs, etc. of people. thus, in UK the social factor that has impacted is age. Now, the pension is given to men who are retiring at age of 65 whereas women at age 62. But changes are been done in demographic factor. In future both men and women retirement age will be same. Here, age will be increased gradually every year to equalise men and women. Till 2020 it will be 66 and 67 till 2028. This change was done on basis of Turner report of 2004.

So, these are the factors that is consider in pension planning. It allows in analysing them and then accordingly developing reforms and deciding tax rate.

Effect of retirement planning before, at and after retirement

Currently, In UK there is proper retirement planning which provide different options for people to retire. First is state pension where government give pension to those who are registered in NIC. Here, amount varies on basis of NIC (Disney, 2016). Another is person pension where pension provider provide money from retirement fund. The workplace pension is provided by employer. Here, staff get fixed income that is paid earlier in pension scheme.

There is great effect of retirement planning. When a person retires early, he has to select specific pension scheme. Also, there are some reformed to be followed as well by client. Moreover, less pension is received from state pension. It is because there are years counted in it those how have contributed in NIC. Thus, amount of pension given is based on NIC. But at certain times workplace does not allot to get retire. During retirement the effect on client is they get pension according to retirement age. It can be 65, 66, 68, etc.

After retirement the effect is client has to pay more tax on amount withdraw. They become eligible for it.

This retirement planning will affect the client in many different ways: Before retirement: Because of new retirement planning there will be changes in retirement age, pension provision, formalities of getting retirement. At retirement: people who are about to get retired will also have to face these changes. They will have to review all kinds of updated policies again.

Impact of tax and legislation on retirement planning

It has been analysed that there is great impact of tax and legislation on retirement planning. This is because government is planning to bring various changes within retirement age, pension etc. So, any change in legislation or tax can directly impact retirement planning (Loibl, Summers and Bruine de Bruin, 2019). In UK tax is imposed on state pension, private pension and earnings from employment. So, if any person takes huge amount of private tax than more income tax is to be paid. The government has set total value of £1,055,000. However, there is some amount that is tax free in pension is when 25% is taken of total pension. Besides that, tax rate also depends on when pension is taken out. So, tax rate depends on retirement age. However, there are certain legislation as well followed.

The tax is imposed on basis of pension and other benefits given. So, if tax rate rises retired people will have to pay more on benefits given to them. Likewise, if legislation is changed then retirement planning is modified. The changes are done in aspect of age, income, pension, etc.

Retirement planning needs

Retirement planning will help in fulfilling wide range of clients in many different ways. In UK the retirement age of men and women vary. However, there are some options available as well to them to get retire. So, it becomes important to identify there needs and develop plan accordingly (Tapadar, Andrews and Pittea, 2019). So, the needs are specified as :

It is necessary to identify at what age people gets retired and what tax rate can be imposed. Besides that, how in future pension scheme will require changes and how it will affect on UK economy. The need of retired people and their income level is to be calculated.

In addition to it, UK government must develop a retirement plan for migrants who enter in UK as labour. This will provide a framework tat what tax rate or reforms are to be followed by them. the needs related to other UK person by doing age segmentation can also be specified or mentioned in retirement planning.

Why further fiscal, State Pension legislation or other changes might be needed between now and 2050

It is analysed that there are some various changes that is required in pension system of UK. Also, UK population is rising every year. Moreover, with rise in migrants from other countries it is estimated that there will be total 9.2 million migrants till 2060. Thus, it will result in ageing population (Vlachantoni, Feng and Falkingham, 2017). However, UK is facing problem of ageing where there is rise from 27% to 43%. Hence, it requires some changes in state pension. The retirement age should be increased and also other benefits must be reduced.

In addition to it, UK labour market is increasing to a great extent. There is rise up to 2.5 % as compared to EU 0.6%. also, till 2060 there will be 80% of women working in UK as compared to EU 75.9%. therefore, more pension will be given to those after retirement. So, it requires changes in pension policy as it will put more economic burden on UK. the change needs to done so that situation can be controlled in future.

CONCLUSION

It is summarized that legislation, a rise in public spending, and an increase in retirement age are key factors in pension planning. Moreover, retirement planning has a significant effect on clients, with tax and legislation playing a major role. For those using an essay typer, these points can help structure a detailed analysis of the complexities involved in pension planning. For example, a rise in age can lead to an increased tax rate. Additionally, retirement needs vary based on age. In this context, the UK government must develop a retirement plan for migrants who enter the UK as labor. By 2060, it is projected that 80% of women will be working in the UK compared to 75.9% in the EU, leading to higher pension needs after retirement. For students seeking assignment help UK, these insights provide a comprehensive overview of the challenges in retirement planning.

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