Boost your pension Wealth and Tax can help

First of all, what type of pension do you have? If it’s an occupational pension, is it final salary or money purchase? If you have a private pension, it could be a personal pension; a retirement annuity contract; a self-invested personal pension; or a stakeholder pension. On top of that, you may have one or more preserved pensions. And are you contracted-in or contracted-out? Which is better for you? Have your circumstances changed since starting your pension?

To many people, these are just words. But to Wealth & Tax Management, they’re the clues to how we can help your pension arrangements be more efficient and profitable.

Are you paying excessive pensions charges?

How much of the money that you pay into your pension is actually allocated to the pension fund? Commissions and charges can take a lot of your contribution: in the worst case we have found, 81% of the policyholder’s money is eaten up by charges, leaving only 19% going into the pension fund!

We find that most of our clients aren’t even aware of how much they’re paying in charges. It isn’t difficult to find out – we’ll happily tell you how.

How is your investment fund performing?

Again, many people start paying into a pension and then forget all about it. Do you know how your fund is performing? We monitor countless funds and can give you advice on who is giving the best return, and whether it’s worth switching. Take a look at the Investments page of this web site.

Don’t pay too much tax!

When you pay into your pension, you automatically receive basic rate tax relief. However, if you’re a higher rate tax payer, like most of our clients, you have to claim the additional relief. It sounds simple but HMRC estimate that 80% of people who are eligible to make this claim don’t actually do so!

And when it comes to drawing your pension, which is the most cost-effective way for your circumstances? Typically, you can take up to 25% as a tax-free sum and purchase an annuity with the rest. That gives you a fixed income for life – but it is taxed as if it were earned income. Then what happens to your spouse, if you predecease him or her? We might also propose a method of keeping your pension fund invested and drawing variable income so that you only take – and pay tax on – what you need at a moment in time.

The options and opportunities are too varied to explain in detail on a web site. If you would like to address any of the issues above please call us on 01908 260418 to arrange an informal conversation leading to a tailormade solution for you.

Alternatively come to one of our seminars to hear a little more about how to reduce your pension costs, improve its performance and mitigate the tax implications.