Need Help with Your Pension
Wherever you are with your retirement provision, don’t be put off from taking action, it s not too late. There are however steps you can take to increase the pension amount you’ll get when you finish working.
Pensions are a very tax-efficient way to invest. If you already have a pension, now would be a good time to contact us about making a lump sum investment to improve it, particularly as the end of tax year is speedily drawing near, or starting a self invested personal pension to increase your choices. You will not have to take 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 yr 2010/11. Contributions above this annual limit are granted but will be taxed. You can invest into any no. of pension schemes (personal and/or company) each year.
You ll receive tax relief on your Investment, so if you are a higher rate 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 twenty percent.
High rate tax payers can obtain up to a further twenty 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 per cent for those making more than 180,000. Wage Earners below 130,000 will not be impacted.
There s a lifetime limit on the size of your pension savings, which is currently £1.75m in the tax yr 2009/10 but rises to £1.8m for the 2010/11 tax yr. If your pot surpasses this, you ll incur tax charges of 55 percent if the surplus benefits are taken as a lump sum and 25 percent 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 drawing your pension increases to 55. 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 before age fifty five in some circumstances, e.g if you retire through ill-health.
Consilium Asset Management Ltd offer advice on self invested personal pensions /sipps in South Gloucestershire.
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.
