One of the most tax-efficient savings vehicle available.


A basic rate taxpayer might contribute £8000 into a Personal Pension and the HMRC will contribute a further £2000

This is the same process for a higher rate taxpayer however they can claim back a further £2000 through their tax return. At retirement, you can take 25% of the fund as a tax-free cash lump sum. The rest of the fund is taxed as income, as and when you take it.

You can put up to £60,000 gross (£48,000 net) into a Personal Pension each year. However once you access your taxable pension funds, the amount you can pay in each year is capped at £10,000 gross.

If you die before 75, your pension fund is payable tax free to your beneficiaries. If you die after 75, the pension is available to your beneficiaries and taxed at their appropriate rate of income tax.

A non-taxpayer can put up to £2880 a year into a Personal Pension and the HMRC will top it up with £720 of tax-relief, even though no tax has been paid.

60 Second Case Study: Why saving into a pension makes sense...

Mr T started saving into his pension years ago. His contributions have been topped up by the Government and he now has a large pot of money for his retirement. 25% of which is totally tax-free. If he dies before 75, his family will get the whole pension as a tax-free lump sum, with no Inheritance tax to pay.

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