Retirement is a major life change and something that many of us look forward to for some years, making plans as to how we are going to spend our extra spare time. But like most major life changes it is also a good time to review your affairs and make sure that you have put everything in order for this new stage of your life.
It is likely that retirement will mean you are making major financial decisions and meeting financial advisers to decide what action should be taken with regard to your pension and investments. As part of this process we would suggest that you should also consider the following:
- Inheritance tax planning: any assets belonging to an individual over £325,000 in value or £650,000 for a couple will be subject to Inheritance tax. There are ways of planning to reduce this liability and retirement would be a good time to consider this if you have not done so already.
- Business or agricultural property: generous reliefs are available if you have business or agricultural assets, but there are a number of conditions that have to be fulfilled in order to qualify for the reliefs. For example, if a farmer were to retire but continue living in the farmhouse then it is likely that Agricultural Property Relief would be lost on its agricultural value. Retirement is therefore a crucial time to review how you might comply with the conditions of the relief in the future.
- Wills: these should be reviewed or drawn up for the first time. Wills can incorporate tax planning if needed and also include protective mechanisms in the form of trusts for the next generation.
- Lasting Powers of Attorney: these are available to deal with both your finances and your personal health and welfare should you be unable to make decisions on these vital matters in the future. Again as you enter your later years it would be an appropriate time to consider this.