Key Financial Solutions
The Lighthouse
Unit 4 West Burrowfield
Welwyn Garden City
Hertfordshire
AL7 4TW
T: 01707 326123
 When it comes to planning for retirement, many people find that they are doing too little too late. Putting away even a small regular sum early on can make a big difference to the lifestyle you will enjoy when you retire. The golden rule for most people, is to not rely on the State alone. Modern pensions benefit from tax breaks and nowadays, you can still contribute to your pension if you don't work. "Pension Simplification" is something of a misnomer because the changes brought about in April 2006 were anything but the “simplification” the government had promised us. In fact many experienced Financial Services practitioners refer to this as pensions “complification”. Actually, there is much about the changes which is good – not least that most people can contribute far more now that previously into their pension plan, and in many cases can achieve a more flexible retirement income than the old rules allowed. Almost anyone in the UK can contribute amounts from £3,600 each year, up to their entire income (subject to an annual allowance initially set at £215,000 for 2006/7 and set to rise each year thereafter). What is more, the government allows you to pay net of basic rate tax relief (higher rate tax payers receive additional relief through the self assessment process). So a net contribution of just £2,808 is worth £3,600 for investment purposes. You can now build up a fund of up to £1.5 million before a tax penalty is applied (this lifetime allowance relates to 2006/7 and is set to rise each year thereafter). When benefits are “crystallised” (i.e. taken), which can be at any time from age 50 (rising to age 55 in April 2010) up to a quarter of the fund can be taken as a lump sum (currently tax free) and the balance can be used to purchase an annuity or drawn as income directly from the fund as an “unsecured pension”. This can vary each year from £0 to 120% of the maximum annuity that you could purchase at the time. Options change at age 75, when no further lump sums can be taken and the maximum “alternatively secured pension” falls to 70% of the amount available to a person of the same sex aged 75. On death before retirement, the entire fund can be returned to the estate or nominated beneficiaries; on death after “retirement” special rules apply, depending on circumstances. If you would like to find out how you are affected, and whether you could be a winner or loser under the new rules: if you would like a 'no obligation' consultation about retirement planning, or if you have any concerns about your existing pension arrangements, please call us on 01707 326123.
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Pensions News from FT.com Government admits flaws in women's NI payments » Thousands of women may have overpaid national insurance contributions, or be ent... Enhanced annuities continue to rise » The rise of the enhanced annuity has been given a further boost with the launch ... Pension fines threaten final-salary schemes » Pensions industry in-fighting has been sparked following the government's announ... One door shuts, but it's still worth getting your foot in » The week before the end of the tax year saw a huge influx in transfers of commer... We are not responsible for the contents of the linked sites  |
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. Not all loans and buy to let mortgages are regulated by the Financial Services Authority.
Please note that the Financial Services Authority does not regulate all the services or products offered by our firm.
Key Financial Solutions is an appointed representative of Thinc Network Services Ltd which is authorised and regulated by the Financial Services Authority. Nick Lofthouse & Nigel Kern trading as Key Financial Solutions Copyright Capital Edge Ltd 2007
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