Pensions & Retirement Provision
Pensions are still one of the most effective vehicles for saving for old age. Under current tax regulations, tax relief is available on the monthly contribution. Standard rate taxpayers have the relief granted at source which means they only pay the net amount to the pension provider who in turn recover the tax element from HMRC (Her Majesty's Revenue & Customs).
For example, if you contribute £100.00 per month your contribution is enhanced by £25.00, giving you a total of £125.00 as an investment amount.
For higher rate taxpayers, the difference between standard rate and higher rate is reclaimed by you from HMRC. The ability to reclaim tax makes pension investment one of the most tax efficient methods of saving for old age.
The essence of pensions is that during your working life you build up a 'pot' of money to be used at retirement. The 'pot' of money is applied at retirement to provide income. HMRC currently allows part of that pot to be taken as tax-free cash. As a rule of thumb the tax-free cash amounts to 25% of the accrued fund. At retirement we can shop around for you to find the best deal for your pension needs. If you choose an annuity you do not have to buy this from the provider with whom you have built up your fund.
It follows therefore that whilst you are building your pension fund you need advice as to where your contributions should be invested and with whom, in order to obtain the best return. At retirement there are numerous options in the form of annuity and income drawdown.
Recent changes in legislation, known as “Pension Freedoms” have in some respects made this an ever more complex area of advice.
We can guide you through all the pre and post-retirement options in a straightforward and uncomplicated manner.