Pension planning is an essential part of everyone’s life - whilst it’s quite natural to focus on your professional life today, your pension arrangements can affect every facet of life tomorrow. Pension arrangements can be complex; therefore it is advisable to work with a pension specialist to ensure your plans stay up to date with changes in legislation. You might want to review some of the key changes to UK pensions with this brief overview, before speaking to a specialist pensions advisor.

It’s certainly true that none of us ever knows what is around the next corner throughout life, and your pension planning can be substantially affected by life events that you perhaps weren’t able to anticipate. As well as changes in circumstances, changes to the UK’s pension legislation also impacts on those plans. 2006 was an important year for UK pension legislation with the introduction of changes originally intended to simplify the laws. However, the last two budgets alone then introduced yet another fresh wave of legislative changes which are going to specifically affect higher earners. The amount that those on higher salaries or business earnings will be able to contribute towards pensions is going to be restricted. It used to be set at up to 100% of earnings with a limit of £255,000 per year but will now be restricted from April 2011. It is not clear at this stage what the new contribution limit will be, but it could represent a very substantial reduction indeed. There are also changes to pension tax relief underway which also target higher earners.

Some analysts argue that the net effect of these changes is that opportunities for pension planning are essentially being reduced. The more astute pension planning services have responded by advising interested higher earners on how to employ a variety of investment vehicles to maximise tax advantages. Two such opportunities are Venture Capital Trusts and Enterprise Investment Schemes.

Both of these schemes can produce products which take on a myriad of different structures and they are quite simply areas beyond the skills (and time available) for the average investor alone. They both require expert professional advice and support through every stage of the process, from the initial enquiry to any initial commitment to invest and for committing funds over the longer term. Your advisor should be fully prepared to discuss the risk profile of each individual proposal to you - those associated with the various financial products for both of these types of scheme will not suit every type of investor.

Whilst Benjamin Franklin once famously quipped that the only two certainties in life were death and taxes, perhaps a third category should be added - changes to personal wealth management. You are usually advised to commit to investment for your retirement, to mitigate unwelcome unexpected events and for happier ones such as an expanding family. Additionally, it is also now more important than ever to take advice to ensure your plans are the most effective possible despite every new change. The better advisors will help you assess where you are today and optimise your plans for the future.