Tax Relief on your contributions
When you pay money into your pension pot, you get tax relief. A basic- rate taxpayer gets 20% tax relief on their pension payments, a higher rate payer 40% and an additional rate payer gets 45%. As a basic rate taxpayer, for every £80.00 you contribute into your plan you get an extra £20.00 from the Government, which means a total of £100.00 is invested into your plan!
Tax Efficient Investment Growth
Your pension pot is invested into a portfolio of investment funds to meet your attitude to risk and grows virtually tax free! This will help boost the amount you will have in your pension by the time you want to take it.
Tax Free Cash
Under current rules you can take up to 25% of your pension savings tax free, either as a lump sum or tax efficient income. The remaining 75% of the fund is taxable when you decide to take it, and can be used to create you an income in retirement.
Pass on to your loved ones tax free
If you die before you’re 75 and before you use your pension savings, they can usually be passed on to your loved ones as a tax free lump sum.
Not able to dip in
Under current legislation you cannot access your pension pot before you’re 55 years old, unless ill- health stops you from working. Sometimes I think this is a good thing as you will not be tempted to dip into your retirement savings.
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