Pension Advice
Posted by admin on March 11th, 2010Wherever you are with your retirement objectives, don t be swayed from taking action, it s not too late. There are however steps you can put into place to improve the pension you ll get when you retire.
Pensions are a highly tax-efficient way to save. If you already have a pension, now would be a very good time to talk to us about making a single premium investment to improve it, especially as the close of tax yr is rapidly nearing, or starting a self invested personal pension to widen your choices. You won t have to draw all your pensions at the same time.
If you are employed, you can contribute up to 100 per cent of the value of your applicable UK salary (salary and other earnings), up to a maximum of 245,000 for the 2009/10 tax yr rising to 255,000 for the tax year 2010/11. Investments above this annual amount are granted but will be taxed. You can contribute into any no. of pension schemes (personal and/or company) each year.
You will get tax relief on your Investment, so if you are a forty % tax payer a 20,000 contribution would cost just 12,000. Basic rate tax relief is added by the government to all contributions at a rate of 20 per cent.
Forty% tax payers can claim up to a further 20 percent tax relief via their tax return. If you earn more than 150,000 you will see the tax relief on your pensions cut from April 2011, tapering from 40 to 20 percent for those earning more than 180,000. Earners beneath 130,000 will not be impacted.
There s a lifetime limit on the amount of your pension pot, which is presently £1.75m in the tax yr 2009/10 but rises to £1.8m for the 2010/11 tax year. If your pot passes this, you ll incur tax charges of 55 per cent if the extra benefits are taken as a lump sum and 25 per cent if taken as income. The income will then be subject to income tax at your highest rate.
From 6/4/10, the age at which you can start drawing your pension rises to fifty five. If you need to, pension benefits can be postponed until you are up to 75 yrs old. You might still be able to take your pension prior to age 55 in some circumstances, e.g. if you retire through ill-health.
Consilium Asset Management supply pension advice and retirement planning advice.
The value of investments and the income from them can go down as well as up and you may not get back your original investment. Past performance is not an indication of future performance. Tax benefits may vary as a result of statutory change and their value will depend on individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent finance acts.