Pension regulations change frequently and can often be complex and confusing.
Yet, used wisely, a well-planned pension is still an extremely efficient form of tax relief and should be a major part of everybody’s long-term financial planning.
Getting expert advice is vital as there’s plenty to consider.
- Tapered annual allowance - As of 6 April 2023, the annual allowance of £60,000 per year has potentially been reduced for high earners. If your “adjusted income” is above £260,000 in the 2023/24 Tax Year, your annual allowance will reduce by £1 for every £2 that your ‘adjusted income’ exceeds £260,000 (to a minimum of £10,000). This is a very complex area of legislation. It’s vital you seek appropriate advice.
- Carry forward of unused reliefs - Carry forward lets you take advantage of any unused allowance you might have from the previous three tax years. Potentially you could receive up to 45% tax relief as a result. Again, this is a highly complex area (particularly where Defined Benefit schemes are concerned) so getting expert advice is essential.
- Lifetime Allowance - As of the 6th April 2023 the previous allowance of 1.073,100 has now been abolished.
It’s never too early to plan for your retirement.
The future may seem a long way away, but the choices you make now could be some of the most important you’ll ever make.
Contact us today to find out more.
The value of a pension with St. James's Place will be directly linked to the performance of the funds you select and the value can, therefore, go down as well as up. You may get back less than you invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
