Maximising Your Pension Fund

The pensions landscape may seem to be in a constant state of flux, but that doesn’t mean you shouldn’t take steps to make the most of your pension fund.

There are a number of ways to save for your retirement, but pensions remain at the heart of most people’s long-term financial plan. Importantly, they are highly tax efficient, with tax relief on your contributions at your marginal income tax rate.

Tapered annual allowance

The tapered annual allowance can be complex, but our team will help you understand its implications. Since 6 April 2020, tapering occurs in cases where you have adjusted income of £240,000 each year. Due to the tapered annual allowance, your annual allowance will be reduced by £1 for each £2 this is exceeded, to a minimum of £4,000.

Carrying forward unused reliefs

There are circumstances in which it may be possible to contribute more than your current tax year’s annual allowance of £40,000, or your tapered annual allowance, where that applies. If this is the case, you could potentially benefit from tax relief at up to 45% using ‘carry forward’.

This can work for you in cases where you’ve contributed under your annual allowance during the previous three years, and where you were a member of a UK-registered pension scheme during that period.

Lifetime allowance

The lifetime allowance is the total amount you can have in your combined pension pots before tax is payable. This sum changes regularly, but we’ll help you optimise your retirement planning and make sure you’re making the most of the lifetime allowance available to you.

The value of an investment with St. James’s Place will be directly linked to the performance of funds you select, and the value can therefore go down as well as up. You may get back less than you initially invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax reliefs depends on individual circumstances.