Pensions are Rubbish! [Video]

If you’ve had a bad experience with pensions you might be thinking they’re a bit ‘rubbish’. In this episode Hilary considers just how true that really is.

Tax Efficient Wrapper

Here’s a quick summary of the eight tax advantages of a pensions wrapper that Hilary mentions in her video:

  • Pension contributions receive tax relief and that means the government are adding back 20% of your tax to your fund.
  • If you pay high rates of tax, 40% or more, you can claim the difference through your tax assessment.
  • Employer pension contributions are a business expense, and they receive corporation tax relief.
  • Whilst these contributions are a benefit, they’re not a taxable benefit.
  • The investments that are held in the pension fund are not subject to paying income tax or capital gains tax.
  • The pension fund is not part of your estate on death. This means that if you die before age 75 any money that’s left in your fund can be paid to your family usually free of inheritance tax.
  • From age 55, 57 from 2028, a tax free lump sum of up to a quarter of the fund can be taken.
  • Pension income is taxed as earned income which means that you can set it against your usual tax allowance.

Remember, this is just a brief summary. Don’t rely on this information alone to make important financial and tax planning decisions. Get some advice!

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More Reading:

Dividends and Pensions

What is Carry Forward?

Important Risk Warnings:

This article and the information on this website is not personal advice. It’s only intended to give you a brief summary or highlight a particular issue for you to investigate further. It is based on our current understanding of legislation and HMRC guidance which can change. Correct as at May 2019. If you’re in any doubt whether a particular course of action is suitable for your circumstances, you should seek professional advice. Tax rules can change and any benefits depend on individual circumstances. And, if you are unsure any reliefs are applicable to you, you should consult your accountant or HMRC.

The value of investments and any income from them can fall as well as rise, so you could get back less that you put in. Past performance is not a guide to the future. It cannot provide a guarantee of the future returns of a fund.

  • Hillary Carden

    Hilary is a force to be reckoned with in the pensions field. She founded Cardens in 1993 and Cardens Pension Trustees Ltd in 1995 and became one of the first women to become a Registered Life PlannerĀ® and with 30+ years experience of advising on and managing pension schemes, she really is an expert in retirement and financial planning.

    Join her online:

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