Kelly Manchester

Wherever you are with your retirement objectives, do not be put off from considering action, it s not too late. There are however steps you can put into place to increase the income you’ll receive when you finish working.
Pensions are a highly tax-efficient way to invest. If you already have a pension, now would be a very good time to contact us about making a single premium contribution to boost it, especially as the end of tax year is rapidly approaching, or starting a SIPP to widen your options. You won’t have to draw all your pensions at the same time.
If you are employed, you can contribute up to 100 % of the value of your applicable UK earnings (salary and other earnings), up to a maximum of 245,000 for the 2009/10 tax yr rising to 255,000 for the tax year 2010/11. Investments above this yearly amount are granted but will be taxed. You can invest into any no. of pension schemes (personal and/or company) each year.
You ll get tax relief on your Investments, so if you are a forty % tax payer a 20,000 investment would cost just 12,000. Basic rate tax relief is added by the government to all contributions at a rate of twenty%.
High rate tax payers can claim up to a further 20 percent tax relief via their tax return. If you earn more than 150,000 you will see the tax relief on your pensions cut from April 2011, tapering from 40 to 20 % for those making more than 180,000. Wage Earners beneath 130,000 will not be impacted.

There s a lifetime limit on the amount of your pension savings, which is currently £1.75m in the tax year 2009/10 but rises to £1.8m for the 2010/11 tax yr. If your pot exceeds this, you ll incur tax charges of 55 per cent if the surplus benefits are taken as a lump sum and 25 % if taken as regular income. The income will then be subject to income tax at your highest rate.
From 6th April 2010, the age at which you can start drawing your pension increases to fifty five. If you need to, pension benefits can be deferred until you are up to 75 yrs old. You may still be able to take your pension prior to age fifty five in certain circumstances, for example if you retire through ill-health.

Consilium Asset Management offer advice on self invested personal pensions /sipps in Bristol.

The value of investments and the income from them can go down as well as up and you may not get back your original investment. Past performance is not an indication of future performance. Tax benefits may vary as a result of statutory change and their value will depend on individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent finance acts.

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