Tax treatment depends on your circumstances and is subject to change
Pensions are packed with features that are designed to boost how much money you have in your pot. And, ultimately, more money means you get to do more of the things you want to do, especially when it’s time to wave goodbye to the 9 to 5.
Auto-enrolment legislation means that, as long as you are eligible, your employer must offer you a workplace pension and contribute to it a minimum amount. From April 6th 2019, this minimum amount is 3% of your gross salary, with you contributing a further 5% (which you’ll get tax relief on). This is effectively a guaranteed monthly bonus from your employer, which is why workplace pensions can be so valuable.
Albert Einstein called compound interest the “eighth wonder of the world.” Who are we to argue? And your pension amplifies the effects of compound interest because of the tax relief, tax breaks and other contributions you might be receiving. Plus, the sooner you start saving into your pension, the bigger the snowball effect. Ultimately, that means more money for you!
When you die, providing your pension allows, a variety of benefits will become available to your beneficiary. These benefits will depend on the type of pension you hold, whether you die before or after 75, and whether you have started to take money from your pension be it a lump sum or regular payments. Your beneficiary also needs to take it within two years of the pension being left to them. And, there’s tax implications they will need to be aware of.
We can help you to make the best possible decisions when it comes to your pension.
Taking pension money early is not right for everyone as it will leave you worse off in retirement. Also, tax treatment depends on your circumstances and is subject to change. That’s why it makes sense to get help from a regulated specialist.
