In the past we have had a very contrarian view on pensions mainly because of the double taxation on income and the death penalties if you wanted to pass them on to your family. We only recommended people start one if their employers would pay unconditionally into the employee’s SIPP (i.e. without asking the employee to make any contributions) or you owned your own company, which can contribute, thus saving corporation tax, especially if you are a higher rates tax payer.
NOW though, they are a completely different proposition. In 2015 the Chancellor removed the penalties on your family inheriting your pot, indeed it no longer has to be a relation. You are also no longer limited by what you can take out and you could even take out your benefits in slices, each one having 25% tax free. One of the golden rules of investing is to have options, and now pensions, although not perfect (still doubly taxed), provide a very flexible way to manage your retirement needs.
It is also possible to open a SIPP and pay in £2,880 p.a. The Government will contribute £720 p.a. to make it up to £3,600 p.a. This is even open to non-taxpayers and children. So where one spouse is earning it is certainly worth considering. Especially if it can be taken without paying tax when retired or left alone and passed on to children.
The biggest risk with the pension world is a political one. All this progress could be reversed at some point in the future. If this risk is too much then there are many other ways to build up a fund for your future than to enter the world of constantly changing, over-bureaucratic, Government raided, double-taxed pensions!
We manage pensions and offer options and guidance when it comes to transferring or taking your benefits from your pension.
No extra charges are made for managing your pensions. The rate is the same since investments will be in one of our model portfolios.