Pensions Advice
Wherever you are with your retirement savings, do not be swayed from considering action, it s not too late. There are however steps you can put into place to increase the income you’ll get when you finish working.
Pensions are a highly tax-efficient way to invest. If you already have a pension, now would be a very good time to contact us about making a single premium contribution to improve it, especially as the final stage of tax year is speedily drawing near, or starting a self invested personal pension to improve your options. You will not have to draw all your pensions at the same time.
If you are employed or self-employed, you can contribute up to 100 % of the value of your relevant UK salary (salary and other earnings), up to a maximum of 245,000 for the 2009/10 tax year rising to 255,000 for the tax yr 2010/11. Contributions above this yearly amount are allowed 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 Investments, so if you are a forty % tax payer a 20,000 contribution would cost just 12,000. Basic rate tax relief is supplied by the government to all contributions at a rate of 20 per cent.
Higher rate tax payers can obtain up to a further 20 percent tax relief via self assessment. 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 making more than 180,000. Earners beneath 130,000 will not be affected.
There s a lifetime limit on the size of your pension savings, 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 surplus benefits are taken as a lump sum and 25 % if taken as income. The income will then be subject to income tax at your highest rate.
From 6 April 2010, the age at which you can start taking your pension increases to fifty five. If you need to, pension benefits can be postponed until you are up to 75 years old. You might still be able to take your pension prior to age fifty five in some circumstances, e.g if you retire through ill-health.
If you are looking at pension advice why not contact our South Gloucestershire office to discuss your own personal requirements.
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.
