Various Governments and financial press have continued to cast aspersions over the long term sustainability of the State Pension and pointed to the need for consumers to make their own retirement provision.

We at Abacus Wealth Management strongly agree that making private pension provision is paramount to ensure consumers have a chance of achieving the type of retirement they desire. However, we also believe the importance of any state pension that they may be entitled to, should not be under estimated or undervalued when planning for retirement. Listed below are some of the reasons for this:

Why is a State Pension Provision Important?

• It provides a guaranteed source of income for life

This is particularly important if you have other sources of income that are not guaranteed, such as:

1. A personal pension scheme where the income provided is dependent on the performance of investments
2. Rental income from one or a portfolio of properties

• The State Pension Schemes of some countries make provision for an annual increase in pensions

Private pension schemes do not offer this valuable feature which helps your income to maintain its value with increases in the cost of living. This is generally known as price inflation.

• It requires no administration on your part other than claiming it when it falls due
• There are no fees for you to pay

What is the Situation in Gibraltar?

• State pension age is currently age 65 for men and age 60 for Women
• Entitlement is based on the number of social insurance contributions made
• For those who have not made the required number of contributions (or who have paid reduced rate contributions) necessary to receive their full entitlement, it may be possible to make a top up contribution to achieve this
• A survivors benefit may be payable in the event of the death of a person
• Gibraltar price inflation has averaged circa 2.7% per year since 1995 and in the June 2017 budget, HM Government of Gibraltar increased pensions by this amount

It is possible to obtain a forecast of your entitlement to the Gibraltar State Pension by completing this form.

We strongly recommend that you complete this form and include the forecast in any review of your retirement planning (particularly in the final ten years before you retire) as this may have a very important bearing on (but not limited to) the following issues:

1. When you will realistically be able to retire
2. The investment risks that you can take/should avoid with any other retirement provision you may have
3. The level of income you can realistically expect to receive when you do retire
4. Whether it is wise/realistic to withdraw a lump sum from any other retirement provision you may have
5. The level of accessibility/flexibility you should look to maintain with any other retirement provision you may have
6. How the death of your Spouse/Partner may affect you financially

What Should You Do Next?

Contact us for a full retirement planning review and we will guide you through this very important aspect to make sure you gain maximum benefit.

Darren Mills , Dip PFS