Pension plans should be the foundation of saving for retirement due to their tax advantages. Tax relief of 20% is added to any net contributions for basic rate taxpayers (increasing a net contribution of £800 to £1,000), while higher rate and additional rate taxpayers can claim 20% or 30% tax relief through their self-assessment tax return.
Modern pension plans have much broader investment options than hitherto, with many plans having the option to invest in external specialist funds. Self-invested personal pensions (Sipps) allow even greater flexibility, as you can develop your own share portfolio or invest in commercial property within these plans. When you wish to take your pension benefits, pension plans allow you (under current rules) to take a tax free lump sum of 25% of the value of the fund at that time.
The Government has decided to increase the state pension age (SPA) in line with longevity statistics, rising now to 67 in 2026. This means that if you do wish to retire sooner than the SPA, you should start planning to make contributions now, as any delay will increase the funding requirement for your income until you reach SPA.
In this issue
- Remember, remember?
- Equal justice for all?
- Compatibility: devolution issues reborn
- Profiting from the past
- RTI for PAYE - are you ready?
- Reading for pleasure
- A modest proposal – civil marriage ceremonies for all
- Opinion column: Alistair Dean
- Book reviews
- President's column
- Fee review: as you were
- Time to draw a line?
- The pay gap: seeking a cure
- Wealth management: Personal injury trusts - how to best invest
- Wealth management: Discretion - the model of choice
- Wealth management: Inheritance tax - discounts up front
- Wealth management: Pensions - time to look ahead
- Whose privilege is it, anyway?
- FLAGS unfurled
- Percentage game
- Rent, rent and rent again
- Sport, rights, and the internet
- An innocent mistake?
- Scottish Solicitors' Discipline Tribunal
- The trouble with in-house lawyers
- Lease of life for the High Street?
- PSG update
- Vacant and ready
- ABS in waiting
- Better ways: where to start?
- Keeping errors in check
- Ask Ash
- How not to win business: a guide for professionals
- What does a speculative fee allow?
- Law reform roundup