September Net

Wherever you are with your retirement objective, don t be swayed from considering action, it s not too late. There are still steps you can put into place to increase the pension you ll receive when you finish working.
Pensions are a highly tax-efficient way to invest. If you already have a pension, now would be a very good time to talk to us about making a single premium contribution to boost it, particularly as the close of tax yr is speedily emerging, or starting a SIPP to widen your options. You won t have to take all your pensions at the same time.
If you are self employed, you can contribute up to 100 per cent of the value of your applicable UK salary (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 yearly limit are granted but will be taxed. You can contribute into any number of pension schemes (personal and/or company) each year.
You will get tax relief on your contributions, so if you are a forty % tax payer a 20,000 investment would cost just 12,000. Basic rate tax relief is added by the government to all contributions at a rate of twenty percent.
Higher rate tax payers can obtain up to a further twenty percent tax relief via their tax return. 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 % for those making more than 180,000. Earners beneath 130,000 will not be affected.

There s a lifetime limit on the size 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 tops this, you ll incur tax charges of 55 per cent if the extra benefits are taken as a lump sum and 25 per cent if taken as regular income. The income will then be subject to income tax at your highest rate.
From 6th April 2010, the age at which you can start taking your pension increases to 55. If you need to, pension benefits can be deferred until you are up to 75 yrs 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 supply pension advice and retirement planning advice.

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.