Due to the limitations of the state pension, it is advisable for most people to save for their retirement. This could
be anything from cash on deposit, ISAs, Endowments, investments. However using one of these savings plans
rather than a pension means you miss out on the enormous advantage of Tax-Relief.
You are eligible for tax-relief on any contributions made to a registered pension scheme. The maximum being the lesser of 100% of your relevant
earnings or £50,000 per year (2011/12). You receive tax-relief at your marginal tax! rate, so for 20% tax-payers, every £100 pension contribution you receive £125 in your pension. For high rate tax! payers the benefits are even better, and a further 20% or 30% relief can be reclaimed.
In addition to tax-relief on contributions, pensions also benefit from tax-free returns on fixed interest and tax free
gains. UK share dividends are taxed at 10% at source (non-reclaimable), but there is no further tax to pay.
If you do not pay any tax, you can still benefit from tax relief on contributions of up to £3,600 gross. This means
you can contribute £2,880 net and receive £3,600 after tax relief in your pension.
Pension planning can be broken down into two stages, pension saving and pension withdrawal.
Pension saving encompasses all forms of retirement savings you make throughout your life time, which can
These investments can in turn include a variety of asset classes.
Pension Withdrawal can include:
The route you opt for will be dependent on your circumstances.
The technical information within this site should help to answer your questions, but if you would like answers to specific questions, please contact
us with your question or to arrange an appointment to discuss your personal circumstances.
Levels and bases of, and reliefs from, taxation are subject to change and any tax reliefs referred to are the current ones and their value will depend on the circumstances of the individual investor.
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Hedgelands, Abbotskerswell, Newton Abbot, TQ12 5PW
Registered in England No. 4694508. Registered Office 32 Monk Street, Abergavenny, Monmouthshire, NP7 5NW
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