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Pension Planning – What’s not to like about pensions?!

Posted: 29th Sep 2014 by Susan Ruddick Pensions

Pension Planning Update

Great news for pension planning! The government is to abolish the 55% pensions death tax charge with effect from April 2015!

This means that if a person who dies is 75 or over, beneficiaries will only pay their marginal tax rate on drawdowns from the pension. At the moment the tax charge is a whopping 55%!

When an individual under the age of 75 dies they will be able to give their pension pot to any beneficiary completely tax free, even if the deceased had already started drawing down a pension from the fund! At the moment, the fund can only be passed on tax free if it has not been touched by the deceased while still alive – otherwise it’s that nasty 55% tax charge again on any monies passed on!

Although the new rules come into force in April 2015, beneficiaries of anyone who dies before that date can still benefit so long as payment is delayed until after that point.

Coupled with existing tax breaks and other changes effective from April 2015, which will allow greater freedom of access to pension funds generally, this news makes saving into a pension fund an even more attractive proposition for all of us…. What’s not to like?!!

Tax relief on money you pay in!
Flexibilty to take out what you want, whenever you want to once you are 55!
Anything you don’t spend will go tax free to your beneficiaries if you die before age 75!
No need to buy an annuity and lose access to your funds!
No need to guess who out of you and your partner is going to live longest!

But but but….

…remember, your pension fund STILL has to last you the rest of your life…..we need to take care and not let all this new freedom go to our heads….if you’re not sure how to plan your retirement spending then get some good, sensible, independent advice. Your still likely to need help deciding where to invest your pension savings in the first place and need to be especially careful how you arrange things when you do start to spend and enjoy your later life!

Contact us

..give our man Nick Lawson a call on 07808 627983 – he’ll help you all the way and make sure you get the most out of these new retirement opportunities!