Sound familiar? When you left school and started working, you probably had no idea what a pension was, how it worked and how it could benefit you, well rest assured you were not alone!
Pensions can be an effective way of managing your finances from a young age all they way up until you intend on retiring from age 55 onwards.
How, I hear you ask? Well, truth be told there are many ways in which a pension, and more specifically pension contributions, can benefit you and potentially others. For example, if you have young children but are unable to claim full child benefit as someone in your household earns above £50,000 per year? Well a pension contribution can help.
Are you lucky enough to earn over £100,000 per year? Well if so, you will be paying higher rates of tax at 40% or 45% and you will have lost some or all of your tax-free personal allowance! Again, a pension contribution can help.
Are you a business owner and would like to look at tax efficient ways of extracting money from your business? Once again …..a pension contribution can help!
Now let’s talk about Tax Relief. Simply put, tax relief is where the government “tops up” a personal pension contribution by 20% but if you are a 40% or 45% taxpayer you can claim an additional 20% or 25% tax relief. This could also be the case for your workplace pension so if you pay tax above 20% then you may be able to claim additional tax relief.
So, whether you’re just starting out or are soon looking to retire, a pension can provide great planning opportunities, it’s not that complicated as we can help simplify your planning and help you with all the paperwork.
If you would like to speak to one of our friendly and experienced Financial Planners then please contact our office on 01778 342291 to arrange a FREE initial meeting.