As life expectancy increases so too does the need for sufficient retirement provision.
To maintain a standard of living of which one has become accustomed, saving through your working life becomes ever more important as reliance on the state becomes ever more uncertain and inevitable day to day living costs increase. Our personal pensions advice team can help you.
Unlike some company schemes, all personal pensions work on a ‘money purchase’ basis. This means that the money you save each month, or each year, in your personal pension is invested (typically in traditional investment funds) and this is then used in retirement to provide you with pension benefits. So, in theory, the more you save the better your pension should be at retirement.
Following changes made on 6th April 2006 to pension legislation, these contracts are very flexible and can provide tax relief on contributions of 100% of your earnings, up to the annual allowance of £40,000, whichever the greater.
However, it is worth noting that following the changes made on 6th April 2017, once you start to take your pension income then your annual allowance will reduce to £4,000 and therefore tax relief on contributions will be limited to 100% of your earnings, up to the revised annual allowance of £4,000, whichever the greater. It is therefore deemed prudent to seek financial advice prior to drawing your pension benefits.