Have you had a bad experience with pensions in the past? If so, it probably left you feeling that they’re a bit ‘rubbish’. But is that true? Watch this video to find out:
8 Tax Advantages
- Pension contributions receive tax relief and that means the government are adding back 20% of your tax to your fund.
- If you pay high rates of tax, 40% or more, you can claim the difference through your tax assessment.
- Employer pension contributions are a business expense, and they receive corporation tax relief.
- Whilst these contributions are a benefit, they’re not a taxable benefit.
- The investments that are held in the pension fund are not subject to paying income tax or capital gains tax.
- The pension fund is not part of your estate on death. This means that if you die before age 75 any money that’s left in your fund can be paid to your family usually free of inheritance tax.
- From age 55, 57 from 2028, a tax free lump sum of up to a quarter of the fund can be taken.
- Pension income is taxed as earned income which means that you can set it against your usual tax allowance.