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Alternative Investment Market (AIMs) For Pension Funds

There has been a great deal of focus on wealth management in recent years, on the long-term sustainability of pension funds. As a direct response, many pension funds over the last few years have been investing heavily in the development of programmes in alternative assets as a means of facilitating improved returns over the medium and long-term.


Wealth managers are continuously reviewing their systems and processes to improve the funding levels of their schemes; aiming to maximise investment returns, protect their schemes against inflation, diversifying their investment portfolios, smoothing investment volatility as well as improve efficiencies through better management processes. Many view this as an important sector in the growth and preservation of the asset positions of UK pension funds. There are numerous barriers to entering this particular market. Specialist skills and experience is required to invest in private funds such as business valuation, financial modelling, sound knowledge of the underlying assets and more often than not, complex legal structures. Therefore a sensible informed approach needs to be taken when investing within this sector.

Key Features
  • Access to Independent Chartered Financial Advisers
  • Pension Valuation, Tracing, Transfer, Release
  • Stockbroker Managed Investments
  • Pension/SIPP/SSAS/QROPS Investments
  • Property in Pensions Funds
  • Bespoke Consultations with Discretionary Fund Managers to build Pension Portfolio
  • Access to Consultations with Chartered Wealth Managers
  • Auto Enrolment Work Place Pension Solutions for Business Owners
Pension Release
Depending on the type of pension, it is possible to make withdrawals from the age of 55. There are no restrictions on how much can be withdrawn, the first 25% is tax-free; the rest is taxed as a regular income. Certain types of workplace pensions do have their own age restrictions so it is worth checking with HR. Withdrawals can be made from any private pensions and most workplace pensions. Withdrawals, however, cannot be made from unfunded public sector schemes such as the NHS, civil service and teachers as well as state pensions. Some pensions, such as final salary schemes, offer a guaranteed income for life as well as other benefits. Transferring out of such schemes may not be the right option as the benefits would be lost.  
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At Berkeley Private Wealth, we understand that for the majority; their pension is key to sustaining their standard of living for years to come. For successful business owners and High Net Worth individuals, pensions are one of the most tax efficient long-term savings options available. If you have concerns about the performance of your current pension fund, talk to us about our pension investment options which typically offer between 7% - 15% net annual returns, which for the majority would be a transformational level of income in their retirement years. Our unique investment strategies offer fixed rates of return, giving you greater certainty over the volatility of stocks and shares. Our client's journey starts with an in-depth consultation to fully understand their financial objectives, review the risks management and protection currently in place as well as conducting a full risk profile. 


Tax Relief Limits

Technically there are no limits to how much can be contributed into a pension. There are however tax relief limits:


Annual Limit

This limit applies to high earners. The current annual contribution allowance for tax relief is £40,000 as well as any unused allowance for the previous three tax years.


Since April 2016, high earners with incomes and pension contribution above £150,000 per annum would get a reduced allowance. High earners with an annual income above £210,000 will get a reduced allowance of £10,000 tax relief annually.   


Earnings Limit

Tax relief on contributions up to your annual earnings. 


Lifetime Allowance
The maximum amount savers can put into their pension pots over their lifetime - known as the "lifetime allowance" - was cut from £1.25m to £1m in April 2016. However, the lifetime allowance will increase from £1m to £1,030,000 to match CPI from 2018/19. We offer a structured approach to pensions, our services include:
  • Bespoke Consultations
  • Access to Independent Financial Advisers
  • Solutions for Individual Circumstances
  • Tax Efficient Investments 
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Pension Tracing
According to government figures, there is an estimated £400 million in unclaimed pension savings. If you are a member of any pension scheme, you would receive an annual pension statement from them. These annual statements would include an estimate of the retirement income that your pension fund may generate upon retirement. If you no longer receive these statements, perhaps due to changing address; you can track down your pension by contacting the pension provider, your former employer if it was a workplace pension or use the pension tracing service. The pension tracing service would try to match the information that you give them to one of the pension schemes on their database and inform you of the results. 
Options For Frozen Work Place Pensions
Frozen workplace pensions have a broad range of options similar to private pensions. Prior to the 2015 pension reform, choices were extremely limited as pension transfers were difficult and costly. Since the reform, there are a number of options available:
Transfer - Transferring your frozen workplace pension directly into your current pension scheme. This could potentially increase the earning potential of your pension fund. It also contributes to the easier management of your retirement fund.
Personal Pension - Using the funds built up in your frozen workplace pension to establish a new personal pension. This can be done with ease by transferring the frozen pension fund into a new stakeholder pension or SIPP. Which can be created via an insurance company or a specialist provider.
Trivial Commutation - Multiple small pension pots totalling no more than £30,000 can be combined into a single lump sum. This can be taken without a penalty from 55 years of age. Those who qualify will be subject to the 25/75 income tax rule.
Leaving it Alone - There is no requirement to do anything. It can be left in the current scheme.
Drawdown Contract - Subject to your pension provider offering this option. Your frozen workplace pension can be accessed by way of a drawdown contract. This involves drawing down gradually from your frozen pension fund via regular cash withdrawals. 
Lump Sum - Larger pension funds which are not eligible for trivial commutation can also be accessed via a single lump sum payment. The same taxation rules apply. As long as the saver is 55 years and over.
Annuity Purchase - The frozen workplace pension is used to purchase an annuity.