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Posts Tagged ‘pension advice’

On 6th April this year, a number of changes were introduced by the Dept of work & pensions targeted at helping women, carers and small earners in retirement, but it was not great news for every person.

One of the most profound alterations is the inflated minimum age for drawing a retirement income. From 6th April, the minimum pension age was uplifted to age 55, affecting more than 4 million individuals who were born between the sixth April ninteeen fifty five & 5th April nineteen sixty who will now have to hold back for up to five yr to get their retirement pension.

The state pension age for adult females also began to increase from 6th April until it reaches sixty five in two thousand and twenty. By twenty twenty six, it is set to increase to sixty six for everyone, until it in the end reaches 68 in twenty forty six.

Additional modifications include a reduction in the Nat.l Insurance (NI) contributions required to qualify for the full basic state pension, which increased from £95.25 a wk to £97.65 a week from the 6th April. Men & adult females will now need to build up just 30 yrs of contributions, which the government anticipates will set aside for an extra forty thousand women who reach pension age in the next tax yr to provide entitlement for the max state pension.

The state second pension will also be affected by the changes & now payments within the upper earnings threshold have been reduced from 20% to 10 %. At some point, this will be moved to a flat rate payment rather than an earnings-related pension, and will continue to be related to inflation, not wages.
A different credits scheme replaces the Home Responsibilities Protection (HRP) scheme, which is designed to help parents & carers to qualify for the government pension. From the 6 April, qualifying years can now be built up by weekly credits. These can then be added on to any paid contributions made when at work, with no limit on the credits awarded, as long as the qualifying rules are met.

For those reaching state pension age after this shift takes place, each complete year of HRP, up to a maximum of 22 years, will be converted into qualifying years for the basic state pension.

Consilium Asset Management provide retirement planningadvice to clients in the South West of England

Wherever you are with your retirement plans, don’t be put off from taking action, it s not too late. There are still steps you can put into place to improve the money you’ll receive when you finish working.
Pensions are a very tax-efficient way to invest. If you already have a pension, now would be a good time to contact us about making a lump sum contribution to boost it, especially as the end of tax year is rapidly emerging, or starting a self invested personal pension to widen your choices. You won’t have to draw all your pensions at the same time.
If you’re employed, you can contribute up to 100 per cent of the value of your applicable UK earnings (salary and other earnings), up to a maximum of 245,000 for the 2009/10 tax year rising to 255,000 for the tax year 2010/11. Investments above this annual amount are allowed but will be taxed. You can invest into any no. of pension schemes (personal and/or company) each year.
You will obtain tax relief on your Investments, so if you are a 40% tax payer a 20,000 contribution would cost just 12,000. Basic rate tax relief is added by the government to all contributions at a rate of twenty%.
Forty percent tax payers can obtain up to a further 20% tax relief via self assessment. 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 per cent for those making more than 180,000. Earners below 130,000 will not be affected.

There s a lifetime limit on the amount of your pension pot, which is currently £1.75m in the tax yr 2009/10 but rises to £1.8m for the 2010/11 tax yr. If your pot surpasses this, you ll incur tax charges of 55 % if the surplus benefits are taken as a lump sum and 25 per cent if taken as income. The income will then be subject to income tax at your highest rate.
From 6/4/10, the age at which you can start drawing your pension increases to 55. If you need to, pension benefits can be postponed until you are up to 75 years old. You might 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 Limited provide 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.