Tax relief: We’ve got you covered

So far we’ve looked at: 

–  tax relief, the secret ingredient that can help your savings grow, and 

–  recipes for saving tax what you start to take your retirement income. 

This week: a selection box of top tax tips and things to think about when you’re planning your retirement income.

Our top tax tips selection box

1.  Are you planning to take some benefits while you carry on saving? 

– Check the money purchase annual allowance – it could affect the amount of tax relief you get.

2.  If you take tax-free cash, what do you plan to do with it? 

–  If you plan to invest some of it, you can keep it tax free by putting it into an ISA. 

3. Do you want to take your tax-free cash all at once, or a bit at a time?

–  You may want to consider financial advice – we can help.

4. Retirement income is taxed, like any other income, on the amount over your personal income tax allowance. 

–  The standard allowance is currently £12,570 a year. 

5.  Your tax position could change when you retire. For example, you could go from paying higher-rate to basic-rate tax. 

–  Your pension provider might not have the right tax code for you, and your starting payments could be taxed on an emergency code. You can claim back tax you’ve overpaid.

6. Are your total pension savings likely to be more than the current lifetime allowance of £1,073,100? 

– You may want to look at lifetime allowance protection.

7. Inheritance tax. Currently your dependants can inherit up to £325,000 from you (£650,000 if you’re a couple) without having to pay any. 

–  Pensions you haven’t yet started to take don’t usually count for inheritance tax, as they aren’t part of your estate.

–  Do you have other savings you can use up first to reduce inheritance tax liability? 

Check our Resource Centre for more top tips on understanding and managing tax on your retirement income. 

No tax on peace of mind

The end of the tax year in early April is a great time to check you’ve taken steps to protect the people who are important to you.

–  You can name the people you’d like your pension benefits to go to if you die before them by filling in ‘expression of wish’ or ‘nomination’ forms.

–  If you’ve already done this, have you had any life changes – such as marriage, divorce, the birth of a child or a bereavement – that mean you need to update your forms?

Find out more about protecting your loved ones – visit our Resource Centre.

We can make it less taxing for you

Tax can be complicated and the rules change from time to time. Our friendly Aspire to Retire experts can help you understand more about how tax affects your retirement savings. 

We’ll work with you to: 

–  decide on the most tax-efficient way to take you retirement income 

–  make a spending plan so you don’t pay more tax than you need to, or run out of money.