Pensions Expertise in Pinner, Harrow & London
Why Save in a Pension Scheme?
Because it’s one of the best ways to save for your older age.
A pension scheme is simply a savings plan designed to provide you with income after you retire. There are tax advantages when saving money in a pension plan compared with other types of savings’ plans.
Pension plans benefit from:
- Income tax relief on pension contributions – at your marginal [highest] rate
- Largely tax-free growth in funds
- 25% of the fund may be taken as tax-free cash
- All of the remaining 75% of the fund is available but subject to tax when taken
- Pension funds are generally exempt from Inheritance Tax
The benefits of tax relief can be substantial, and it grows with compound interest.
How Much Can You save in a Pension Scheme?
There’s no limit on how much you can contribute to your pension scheme, BUT there is a limit on how much you can contribute and still get tax relief. This is the Annual Allowance: an individual can make total contributions of up to £40,000 or 100% of their annual earnings (whichever is lower) to all their pensions each tax year and receive tax relief on them. Even without taxable income you can still contribute up to £3,600 per year.
For high earners, the Annual Allowance may be tapered dependent on income levels, reducing to as little as £4,000. Getting expert advice is essential to make sure you don’t make an unauthorised contribution by mistake and become subject to tax.
You may be able to pay in far more – up to £160,000 using Carry Forward rules. It’s worth talking to us to find out. Get in touch today for a free copy of our Pensions Guide and to request an initial consultation.
How About Tax Relief on Pensions?
If you are an individual under 75 years of age and resident in the UK you can contribute into a personal pension and receive tax relief on those contributions.
Contributions are made net of basic rate tax relief, so you only actually contribute £800 for every £1,000 of contributions paid.
Higher and additional rate taxpayers can then claim additional relief from their Inspector of Taxes/ Self Assessment tax return. A 40% taxpayer therefore only pays £600 for every £1,000 of contributions.
Monies in pension have no liability to tax on capital gains and all forms of investment income, retained in the pension, are also tax free. Money is therefore likely to grow faster in a Personal Pension than in most other forms of investment.
Pensions advice is readily available from Talis’ highly experienced team and is essential if you want to make the most of your pension in retirement. We don’t do jargon – just the simple information you need to make an informed choice. Contact us today for an initial chat to find out how we can help you.
Click here to access a pension calculator
Click here to see how long your drawdown pot may last
There are two main types of Pensions:
Money Purchase Pension
Also known as Defined Contribution Schemes: you can choose the level of contributions and the retirement outcome is determined by investment performance.
You may be contributing to one or more. You may have left the plan and it is still ‘sitting there’.
Do you know what you can do with this contract? Does it have the flexible benefits that have been available since 2015? Are the charges and performance in line with your expectations?
Or you may have several personal pensions with different providers and are looking to consolidate all of them into one plan for simplicity and control.
How can we help?
We can see whether your plans are really working for you or not. Then perhaps we can put it somewhere where it will do better for you!
Defined Benefit or Final Salary Plans
These were (and sometimes still are) offered by some larger companies and government bodies.
How can we help?
Do you know what the terms of your contract are, when you can take your pension and how much? We can help you find out and include these benefits within your retirement strategy. They include guaranteed benefits which must be considered carefully before switching away.
Book a Pension Performance ReviewTM with us and while cannot promise you a better return, we can help you to make the most of your hard-earned money and give you the confidence that your investments are being properly monitored by independent pension professionals who are on your side. Contact Us for further information on Pensions Switching and Transfers.
Retirement Isn’t Just About Your Pension
A pension has advantages that other savings and assets don’t. However you could also use your ISAs, Property Investments etc, AND there are emotional and practical things as well to think about. If you’re at the point of actively considering cashing in on your pension and/or drawing on the funds to support your retirement, then take a look at our Preparing for Retirement page first to read about the various options that may be available to you.
It’s never too early to start thinking about your pension so get in touch using the contact form, or call us on 0208 581 0088.
“The UK government is broke – there has never been a more important time for all of us to safeguard our own futures…” Simon Webster