Pensions have long been a highly tax-efficient way to save for retirement. If applicable to your particular situation, here are two opportunities you may wish to consider before the rules change next April.
50 per cent tax relief
While the 50 per cent additional tax rate is in place, it is still possible to receive up to 50 per cent tax relief on contributions to pensions during this current tax year. The 50 per cent rate will be reduced to 45 per cent from 6 April 2013, and this is therefore the last tax year to receive tax relief at up to 50 per cent on pension contributions.
Carry forward of unused reliefs
You may be able to contribute in excess of the annual allowance of ?50,000 and receive tax relief using Carry Forward relief if you have contributed less than ?50,000 in any of the previous three tax years. If you pay 50 per cent tax, you need to do this in the current tax year to maximise tax relief before it drops to 45 per cent. As this is a complex area, professional advice should be sought.
All figures relate to the 2012/13 tax year. A pension is a long-term investment, and the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
Weighing up all the options when you are thinking about retirement planning can seem daunting. To find out how we can help you, please contact us to discuss your requirements .
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change. The value of investments and income from them may go down. You may not get back the original amount invested. Pension drawdown can leave your funds open to investment risk and is not suitable for everyone.
The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a guide to future performance. Please contact us for further information or if you are in any doubt as to the suitability of an investment.
The content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested.
Marcin Zientek
Independent Financial Adviser
Dip PFS, CeMAP
Scottsdale Consulting Ltd
Tel: 0845 504 6444
Mob: 07929 446 735
Email: m.zientek@sc-ifa.co.uk
Follow me on Twitter/LondonAdvisor
www.ScottsdaleConsulting.co.uk
Independent Financial Advisers UK | Financial Advisor UK| Independent Financial Advisor London
Source: http://www.ecademy.com/node.php?id=180815
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