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    Pensions and Tax

    Pensions and Tax

    As you have probably gathered, it would be almost impossible for us to describe all of the rules surrounding pensions and how they interact with the UK taxation system. Nevertheless, if you wish to have a look at some of the detailed rules on which your pensions are based, click the link below to be taken to Her Majesty’s Revenue and Customs official book on pensions and tax:

    Registered Pension Schemes Manual from HMRC


    At Opening Doors Finance, our primary concern for you as a pension investor is to ensure you receive all of the tax reliefs and benefits to which you are entitled. Any of the following changes in the tax system should, almost always, prompt a review of the reliefs / exemptions that you are receiving at that time:

    • Personal Allowances being increased / decreased
    • Basic Rate tax band being raised or lowered (or the tax charge for the band itself being raised or lowered)
    • Higher Rate tax band being raised or lowered (or the tax charge)
    • Additional Rate tax band being raised or lowered (or the tax charge)
    • The removal of any of the above e.g. the government is discussing the removal of the Additional Rate Tax band in the 2013 tax year
    • Tax charges becoming contingent on your age when previously they might not have been

    Our aim as your Financial Planner is to save you making costly errors when it comes to your pensions and tax. It is quite possible that you or your pension fund could be missing several thousand pounds in pension benefits. (We had one such client that suspected he needed a review and we calculated that HMRC owed him between 4 and 6 years worth of relief.) Without a detailed review of your pension arrangements, you could be assuming that you are maximising your reliefs already. Often that is not the case but is very much dependent upon the type of pension scheme you are currently a member of.

    It was on 6th April 2006 that the Government at the time ushered in what was supposed to be a new era of pensions simplification. The new rules under “A-Day” (as it was called) were designed to both encourage greater savings into a pension and help make sense of the wide variety of pension rules that had evolved over a century or so. Much good has come from these new rules but the pensions framework is still far from simplified.

    Again, we would encourage you to have a review of your pensions. Feel free to contact us by telephone, email or by clicking here

     

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    Opening Doors Finance is an Appointed Representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Services Authority. Intrinsic Financial Limited and Intrinsic Mortgage Planning Limited is entered on the FSA register (http://www.fsa.gov.uk/register/) under reference 440703 and 440718
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