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While saving for retirement is something everybody needs to consider, in recent years pensions became unfashionable. However the new pension rules make pension saving a very attractive option once more |
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Every pension contribution you make earns basic rate tax relief. As an example, if you put £100 in, the Government automatically add £25, making the contribution worth £125. High Rate Tax payers claim additional relief via their self - assessment form.
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Once you are aged 55 or over, you can take 25% of the fund value as a tax free lump sum.
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The new rules introduced by the UK Government mean that there are no longer any rules or limits on how much you can take out of your pension fund. Once you are aged 55 or over, you can take as much or as little out of your pension fund as you wish. You could even take it all as a lump sum if you want.
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The rules on what happens to your pension fund if you die have been significantly improved. In many cases your partner, children or beneficiaries can inherit your pension fund free of tax. If you die aged 75 or over, they will only pay tax at their marginal rate, and they can take your fund as a lump sum if they want. If they choose to use the fund to provide a pension for themselves then again it will be transferred into their pension fund free of tax.
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There are no rules on how you make your pension contributions. You can start or stop as you like, increase or decrease when you like (subject to a minimum premium level) oryou can pay in single lump sums (all attracting tax relief). You can even get your employer to contribute.
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Our provider, Royal London, has won many awards for its pension products and service. As an example it has won MoneyMarketing's Best Pension Provider award for 2011, 2012, 2013 and 2014.
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| Royal London's Key Features Document |
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