It’s estimated that people aged 45 to 54 spend more time planning their summer holidays than they do planning their pension*. However, if you want to be able to enjoy holidays in retirement, then you need to save enough now to be able to afford them.
Make the most of pension contributions tax relief
To encourage you to save for your retirement the government provide tax relief on your annual pension contributions. In allowing pension tax relief, the value of the money you’re saving for retirement is helped by money that would otherwise have gone to the tax man.
The way it works will depend on the way your pension scheme operates its tax relief. However, it could mean that a £1 contribution only costs you 80p if you’re a basic-rate taxpayer, as little as 60p if you pay higher-rate tax and 55p if you pay additional-rate tax*.
For the current 2017-18 tax year you can get tax relief on pension contributions of up to 100% of your earnings or a £40,000 annual allowance, whichever is lower. Any contributions you make over this limit will be subject to Income Tax at the highest rate you pay.
So it makes perfect sense to start planning for your retirement now and make the most of the allowances provided by the government.
THE VALUE OF PENSIONS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU INVESTED.
TAX TREATMENT DEPENDS ON INDIVIDUAL CIRCUMSTANCES. TAX TREATMENT RATES AND
ALLOWANCES ARE SUBJECT TO CHANGE.
TAX PLANNING IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
Start saving for your retirement now
We can help you make sure you save enough for the retirement you want and take full advantage of the tax relief provided by the government. So act now and arrange a meeting by calling 01943 851080.
* Fidelity – making pension tax relief work for you - factsheet 2017