Personal Pensions
Do you want to save for your retirement? A personal pension is a saving product that can help maximise the money you are saving. Our personal pensions advisers can help to give you financial freedom, independence, and peace of mind with a bespoke personal pensions plan.
Personal Pension Plans
A personal pension plan helps you save money for retirement and is available to any United Kingdom resident who is between the ages of 16 and 75 (Children under 16 cannot start a plan in their own right but a Legal Guardian can start one on their behalf). You, in conjunction with your adviser, choose the pension provider and make the arrangements for paying the contributions to the plan.
You can start a personal pension even if you have a workplace pension or if you’re self-employed and don’t have a workplace pension. You don’t have to be working to take out a Personal Pension Plan and you can also provide a Personal Pension Plan for your spouse/partner or your child/children.
When you contribute to a Personal Pension plan, your money is invested by the pension provider (usually an insurance company) to build up a fund/pension pot over a number of years.
Tax relief
If you’re a basic rate taxpayer, your pension provider will claim back Income Tax at the basic 20 per cent rate on your behalf on the contributions you make and add it to your pension pot. Higher rate taxpayers claim the additional rebate through their tax returns.
Contribution limits
The total amount (the ‘annual allowance’) you or your employer can contribute to a defined contribution personal pension scheme, or schemes, is limited to £40,000* per annum or your annual salary, whichever is lower. If you contribute more than that you will pay a tax charge. Your pension is also subject to a 'lifetime allowance' which is the total value of pension savings you can have before incurring a tax penalty. This figure is currently £1,073,100*.
Tax-free cash
Most schemes allow you to withdraw 25% of your fund tax-free from age 55 onwards. Subsequent withdrawals are subject to income tax.
The size of your pension pot will depend on:
- the amount of money you paid into the plan
- the performance of the plan’s investments
- charges payable under the plan
- advice charges (where applicable)
Taking your pension
Although most personal pension schemes specify an age when you can start withdrawing benefits from your personal pension (usually between 60 and 65) you are allowed to do that from age 55 if you wish. You don’t have to stop work to draw benefits from your plan.
Death Benefits
If you die before the age of 75 and haven’t purchased an annuity, your beneficiaries can inherit the entire pension fund as a lump sum or draw an income from it completely free of tax. If you’re over 75 years of age when you die, there will be tax to pay on any withdrawals made by the recipient of your fund.
*Tax year 2022/2023
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 varies according to individual circumstances and is subject to change.
The financial planning experts at Taylor James Financial Services will help guide you through the entire personal pension planning process.
Our pension advisers are based in Croydon and help clients in the surrounding areas, including: Warlingham, Westerham, Woldingham, Caterham, Oxted, Banstead, Coulsdon, and Purley.
We're here to help you plan for the retirement you want. We'll work closely with you to establish your goals and then devise the most effective methods of getting there.
Do you want to save for your retirement? A personal pension is a saving product that can help maximise the money you are saving. Our personal pensions advisers can help to give you financial freedom, independence, and peace of mind with a bespoke personal pensions plan.
Personal Pension Plans
A personal pension plan helps you save money for retirement and is available to any United Kingdom resident who is between the ages of 16 and 75 (Children under 16 cannot start a plan in their own right but a Legal Guardian can start one on their behalf). You, in conjunction with your adviser, choose the pension provider and make the arrangements for paying the contributions to the plan.
You can start a personal pension even if you have a workplace pension or if you’re self-employed and don’t have a workplace pension. You don’t have to be working to take out a Personal Pension Plan and you can also provide a Personal Pension Plan for your spouse/partner or your child/children.
When you contribute to a Personal Pension plan, your money is invested by the pension provider (usually an insurance company) to build up a fund/pension pot over a number of years.
Tax relief
If you’re a basic rate taxpayer, your pension provider will claim back Income Tax at the basic 20 per cent rate on your behalf on the contributions you make and add it to your pension pot. Higher rate taxpayers claim the additional rebate through their tax returns.
Contribution limits
The total amount (the ‘annual allowance’) you or your employer can contribute to a defined contribution personal pension scheme, or schemes, is limited to £40,000* per annum or your annual salary, whichever is lower. If you contribute more than that you will pay a tax charge. Your pension is also subject to a 'lifetime allowance' which is the total value of pension savings you can have before incurring a tax penalty. This figure is currently £1,073,100*.
Tax-free cash
Most schemes allow you to withdraw 25% of your fund tax-free from age 55 onwards. Subsequent withdrawals are subject to income tax.
The size of your pension pot will depend on:
- the amount of money you paid into the plan
- the performance of the plan’s investments
- charges payable under the plan
- advice charges (where applicable)
Taking your pension
Although most personal pension schemes specify an age when you can start withdrawing benefits from your personal pension (usually between 60 and 65) you are allowed to do that from age 55 if you wish. You don’t have to stop work to draw benefits from your plan.
Death Benefits
If you die before the age of 75 and haven’t purchased an annuity, your beneficiaries can inherit the entire pension fund as a lump sum or draw an income from it completely free of tax. If you’re over 75 years of age when you die, there will be tax to pay on any withdrawals made by the recipient of your fund.
*Tax year 2022/2023
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 varies according to individual circumstances and is subject to change.
The financial planning experts at Taylor James Financial Services will help guide you through the entire personal pension planning process.
Our pension advisers are based in Croydon and help clients in the surrounding areas, including: Warlingham, Westerham, Woldingham, Caterham, Oxted, Banstead, Coulsdon, and Purley.
We're here to help you plan for the retirement you want. We'll work closely with you to establish your goals and then devise the most effective methods of getting there.
