I can’t stress strongly enough the importance of having a decent level of income at this time of life. Those of you who have planned and saved for your retirement have ensured that your standard of living will be maintained. On the other hand, it goes without saying that those who don’t plan and save will not be in a position to enjoy the same lifestyle as those who have. Please look at the pyramid and decide where you want to be at 65.

A SIPP is a UK-registered Pension Scheme and whereas QROPS is suitable for larger pension transfers, a SIPP is better for smaller amounts, as it tends to be cheaper to set up. The rules are not dissimilar and like QROPS’s, SIPP’s can be used to concentrate all your frozen UK pensions into one arrangement including protected rights. Just like QROPS, you never need to purchase an annuity and there are tax benefits on succession.

Whatever your age the best time to start saving for your retirement is now as the cost of delay can have a devastating effect on the size of your pension pot.

There are many Insurance companies who market offshore pensions denominated in Sterling, Euro and US Dollars, which are suitable for all nationalities. Most have a minimum commencement contribution of only 150 US$ or currency equivalent per month, so are very affordable. These retirement schemes have many benefits and can provide you with a simple way to commence saving. Basically they are “dressed up” as insurance policies and being domiciled offshore, grow free of taxes.

So money builds up tax-free and if need be, the whole pot can be taken as a tax-free lump sum on retirement. If you were to die before retirement, then 101% of the value of the fund at that time would be paid as a lump sum to your beneficiaries. Most companies have special deals at the moment, wherein you receive an enhanced allocation by way of a contribution from the company, which will at least match your own.

Saving for your retirement via a monthly investment can be very advantageous, as you’ll benefit from unit cost averaging over the longer term.

The following illustration shows all the major stock market declines over the past 26 years. You’ll notice that in every case the market has always bounced back and equity investments have out-performed money market investments, over the longer term. Not only that, but savers investing in regular savings plans including pension plans will have enjoyed the benefits of unit cost averaging by purchasing many more units with their monthly contributions when the market has dipped.

The bigger picture
The case for investing in equities

Taking into account the effects of any short term volatility, the case for investing in equities remains as strong today as it has ever been for those investors with a long-term investment horizon. Over the last 25 years, an investment in the S&P 500 would have grown to almost 20 times its original value.