your friends in finance


Retirement and Pension Planning in Northumberland

What is a Pension? Quite simply, it’s a way of saving for retirement that is tax efficient.

You build up the money you save in a pension pot which is invested. When you take your pension the money in the pot is used to buy an annuity, you can also take a tax free lump sum at this point.

However, at Lifelong we are not fond of the word ‘pension‘; because we take a holistic approach to financial planning we view it as ‘retirement and wealth planning‘. This is because we recognise that many assets can make up your retirement planning and income; properties, investments, business sales to name but a few.

Pensions come in various guises for examples, Stakeholder, Personal, Self Invested, Section 32, Superannuation, Group Personal Pension, Group Final Salary and soon to be Personal Accounts. With all these choices it’s essential that you have professional input to choose the correct vehicle for your circumstances.

Talking about pensions and annuities often confuses people as they believe them to be the same thing. Thinking about it in simple terms a pension is just the savings method to build up a pot of money before you retire. The annuity is what provides you with a guaranteed income when you retire – it’s a contract between you and an insurance company who, in return for your pot of money (pension fund), offer you a guaranteed income for life.

Do I have to take an annuity when I retire?

There is another option that we can offer you when you come to retire; it’s called Income Drawdown.

The idea is that when you retire you don’t immediately take an annuity; instead you take some of your pension pot money and use this as an income. This means that the remaining money in your pot can continue to attract growth. It often gives clients much more flexibility in how and when they choose to retire, sometimes by utilising the TFLC to provide a tax free income.It should be noted that this type of plan is normally for those with larger pension pots and for those willing to take more risk. There are also various rules that differ from provider to provider.


The Financial Services Authority does not regulate taxation and trust advice. Levels, bases of and reliefs from taxation may be subject to change and depend on the individual circumstances of each client

Financial Services Compensation Scheme (‘FSCS’)
We are covered by the Financial Services Compensation scheme (FSCS) if we cannot meet our obligations. This is dependent upon the type of business and the circumstances of the claim.

  • Most types of investment business are covered up to a maximum limit of £50,000
  • Insurance advising and arranging is covered for 90% of the claim, without any upper limit.

Further information about this compensation scheme arrangement is available from the FSCS.