Pension help please....

[j90rdn]

Quick update in case anyone's interested. My accountant made me aware of the tax benefits at different levels of pension contribution and it does make a difference to my tax liability, particularly cashflow as it reduces Jan 25 and July 25 payments by a fair bit. Bit of a no brainer. I'll be making similar contributions in 24/25 that will further reduce these payments.

Funds will be allocated to AVIVA's default fund (Fund 2, Series 6) which is relatively low risk with a 0.7% annual fee but I can move some or all of it and future contributions to different funds once I've got my head around the options. I may ask for further advice on this.

Your level of risk really depends on your appetite for risk (obvious) but also your current age, and projected age of retirement. The idea being the fund(s) you invest in should become less risky the closer you get to retirement.

Depending on your financial position, most people don't realise that you'll be paying 60% tax for earnings between £100k and £125k, as you loose £1 of your personal tax relief for every £2 over £100k. Using a pension deducted at source to bring down your taxable income really helps if your yearly income falls into this bracket.

[M1011]

Depending on your financial position, most people don't realise that you'll be paying 60% tax for earnings between £100k and £125k, as you loose £1 of your personal tax relief for every £2 over £100k. Using a pension deducted at source to bring down your taxable income really helps if your yearly income falls into this bracket.

Yea it's pretty much essential in that income bracket I think. 62% saving if you're able to contribute to your workplace pension via salary sacrifice and avoid NI too. Considerably more if you've got young children due to the support that stops at £100k taxable income, meaning potentially greater than 100% saving (i.e. folk can actually end up with more money in their pocket today as a result of contributing more to their pension for the future - big win!).

Your level of risk really depends on your appetite for risk (obvious) but also your current age, and projected age of retirement. The idea being the fund(s) you invest in should become less risky the closer you get to retirement.

Kind of debateable. It is the traditional way and gears you up for buying an annuity, but if you don't intend to buy an annuity and are keeping your funds invested to keep generating returns throughout your retirement then this may not be a winning strategy. Of course, crystal ball stuff really, who knows what will happen!

[westberks]

Yea it's pretty much essential in that income bracket I think. 62% saving if you're able to contribute to your workplace pension via salary sacrifice and avoid NI too. Considerably more if you've got young children due to the support that stops at £100k taxable income, meaning potentially greater than 100% saving (i.e. folk can actually end up with more money in their pocket today as a result of contributing more to their pension for the future - big win!).



Kind of debateable. It is the traditional way and gears you up for buying an annuity, but if you don't intend to buy an annuity and are keeping your funds invested to keep generating returns throughout your retirement then this may not be a winning strategy. Of course, crystal ball stuff really, who knows what will happen!

both very good points and a big area for basic pension advice. The derisking as you approach retirement (lifestyling) is less relevant now with flexible pensions in retirement; if you are likely to be retired for 30 years and don't buy an annuity then you are probably better off maintaining a similar level of risk. You just need a strategy whereby you have some cash element to cover income in shorter periods and not deplete funds when markets do fall.

the indirect tax regime by stealth using loss of personal or child allowance really boils my piss as its so underhand and people can easily overlook it if they don't get advice.