Due to the limitations of the state pension, it is advisable for most people to save for their retirement. This could
be anything from cash on deposit, ISAs, Endowments, investments. However using one of these savings plans
rather than a pension means you miss out on the enormous advantage of Tax-Relief.
You are eligible for tax-relief on any contributions made to a registered pension scheme. The maximum being the lesser of 100% of your relevant
earnings or £50,000 per year (2011/12). You receive tax-relief at your marginal tax! rate, so for 20% tax-payers, every £100 pension contribution you receive £125 in your pension. For high rate tax! payers the benefits are even better, and a further 20% or 30% relief can be reclaimed.
In addition to tax-relief on contributions, pensions also benefit from tax-free returns on fixed interest and tax free
gains. UK share dividends are taxed at 10% at source (non-reclaimable), but there is no further tax to pay.
If you do not pay any tax, you can still benefit from tax relief on contributions of up to £3,600 gross. This means
you can contribute £2,880 net and receive £3,600 after tax relief in your pension.
Pension planning can be broken down into two stages, pension saving and pension withdrawal.
Pension saving encompasses all forms of retirement savings you make throughout your life time, which can
include:
These investments can in turn include a variety of asset classes.
Pension Withdrawal can include:
The route you opt for will be dependent on your circumstances.
The technical information within this site should help to answer your questions, but if you would like answers to specific questions, please contact
us with your question or to arrange an appointment to discuss your personal circumstances.
Levels and bases of, and reliefs from, taxation are subject to change and any tax reliefs referred to are the current ones and their value will depend on the circumstances of the individual investor.
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Hedgelands Financial Services,
Hedgelands, Abbotskerswell, Newton Abbot, TQ12 5PW
Hedgelands Financial Services is a trading name
of Honister Partners Ltd. Honister Partners Ltd
is an appointed representative of Sage Financial
Services Ltd, which is authorised and regulated
by the Financial Services Authority. Sage Financial
Services Ltd is entered on the FSA register (www.fsa.gov.uk)
under reference 150452. The information and content
of this website is intended for UK consumers only
and is subject to the UK regulatory regime. The
FSA do not regulate will writing services and some
forms of mortgages and tax planning services. Honister
Partners Ltd Registered Office 1 Nicholas Road,
London W11 4AN. Registered in England and Wales
no. 06923303. |
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