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Best Pension Annuity
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On-Line Retirment Products that put you in control
On-Line Retirment Products that put you in control

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Best Pension Annuity's posts

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Today a customer visited our site and asked "what is the percentage of tax is deducted from a pension lump sum".

This is a typical question we are asked, particularly following the announced budget changes. The answer is very simple and applies to every possible scenario  both now and in the future.

Currently you can take a lump sum from your pension that is not more that 25% of the pension funds total value. This lump sum must be the first benefit taken and if it is then it is paid tax free.

From April 2015, it is proposed that you can take as much or as little as you want as a lump sum. However no matter how you take it, the first 25% is tax free and the remaining 75% is always liable to tax.

To be clear, after the first 25% which is paid tax free, the remaining 75% no matter if you take it as one lump sum, a series of lump sums or a small regular payment then it will be liable to income tax at your marginal rate.

Visit our new website www.best-drawdown-pension.co.uk and see how me can help you manage your pension fund in line with your wishes
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If you take tax free cash are your pension funds crystallised ?

This question was asked by a visitor to our website today. The answer to the question is - Yes !!

I'll explain more about this term in a moment, but the important thing is that if you only want to take your Tax Free Pension Lump Sum then it is very important that you make sure you do it properly. That is exactly what we do !!

If you want to know more about taking a lump sum from your pension then use the link below to visit the Best Pension Annuity website.

The pension world is full of unnecessary jargon, Crystalisation perhaps being the most complicated - so let's make it simple. An un-crystallised pension fund is one where you have not taken any of the money out in the form of a Tax Free Lump Sum and  / or and income.

If you tale money out of your pension fund in the form of an income and / or a Tax Free Lump Sum, then your pension fund is now crystallised.

But why is this important  ?

Tax Free Lump Sums can only be taken from un-crystallised funds.

If you have previously taken an income or less than the maximum lump sum, then your pot is crystallised and you will not be able to take further tax free cash.

So this is important if you want to make sure you have the opportunity of taking the maximum allowable tax free amount from your pension. It is also important to remember that if you invest for guaranteed growth in a guaranteed drawdown product, you must take your tax free cash when you enter the product, otherwise you will lose the entitlement.

Managing your pension fund between crystallised and un-crystallised  pots is likely to become more important if you want to take maximum advantage of the new pension rules planned for April 2015.

This is our area of expertise for no obligation help and information call us on 020 33 55 4827

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The Regulator is Strangely Silent ?

We received a communication from the FCA today giving many updates  in the industry - What did it say about the new pension changes announced by the Government ? ABSOLUTELY NOTHING !

For years the regulator has given companies who put customers into Drawdown a hard time, seeing Annuities as the default option - that way guaranteeing that a customer has an income for life. Now Mr Osborn says its fine to blow the lot on a holiday (I would have lost my license for making such a claim) - While I welcome the changes, I fear that in 10 years time the PPI claims companies will see this as the next great compensation bonanza !!! 

Come on FCA you have to be clear and unequivocal - this could yet again bring the industry into disrepute
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Don’t get too excited about the Chancellor’s Pension Changes

While we very much welcome the Chancellor’s budget with respect to Pensions, there appears to be a number of contradictions that imply that if your pension fund is worth more than £30,000, you won’t be able to take all of your pension fund in one go, as is currently being reported.

We believe the key pension changes apply to people in company defined benefit pension schemes who are compelled to buy an annuity, but not the whole pension market.

If you could take as much from your pension as you wanted, then there would be no point in announcing an increase to the drawdown rate to 150% of GAD - there would be no limit.

Likewise the Flexible Drawdown Minimum Income Limit would be abolished if the customer could take it all as they wanted. Instead the Chancellor has reduced it from £20,000 to £12,000 per annum.
Both of the announcements above limit how much of a pension fund after tax free cash can be used, which contradicts many of the claims currently being reported on TV and Radio.

It is possible that these changes may only apply to people who are in company Defined Contribution schemes and not everybody who has a private pension – even though that too is a defined contribution scheme. Further clarification will be posted here when this becomes clear.

The main headlines of the budget with regard to lump sums from pensions are as follows :
No change to minimum age for taking benefits – Age 55 or over.

No change to maximum Tax Free Lump Sum – Maximum 25%.

Increase to how much of the remaining 75% can be taken – All amounts taken from the remaining 75% will be subject to income tax at your marginal rate.

The amount you can take from drawdown has been increase from 120% to 150%. If you could access all of your fund, this limit would have been completely removed.

Flexible Drawdown allows people with a minimum guaranteed income in retirement to take any unused pension fund as a lump sum or series of lump sums. The minimum income requirement is currently £20,000 - but the Chancellor has announced it is to be reduced to £12,000. If you were able to take all of your pension fund as you wanted, then the MIR would have been set to £0 (zero) or removed completely.

These changes imply that many people will not to be able to take all of their fund in one go if they wish. However these changes are most welcome and will help many customers use their pension fund in a way that best suits them.

Osborne makes staggering changes to the Pension Rules in the UK.

I ma writing this as the budget is still being announced but the changes seem to reflect exactly what many of our customers want

Watch this space !!

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Answer to one of our most common questions
Pension -  Can I take lump sum and continue paying in ?

A very common question that requires a bit of explanation, but the simple answer is YES, more importantly we can arrange this for you. Just visit http://www.best-pension-annuity.co.uk/Pension_Lump_Sum_Only.php

Unlike many similar contracts on the market, our contract allows you to take 25% of your pension fund as a TAX FREE lump sum and leave the rest invested until you are older, you can also continue paying regular pension contributions. Those contributions will also attract tax relief at your marginal rate. At a later stage you can even take a further TAX FREE lump sum from the contributions you made after you took the original lump sum.

Once you are aged 55 or over it is perfectly legal to take a lump sum from your pension. If you want to take a lump sum from your pension and continue to pay into the pension the contact me at Best Pension Annuity by calling 020 33 55 4827. You can ask as many questions as you like – we will also provide you with free quotes and information pack all without any obligation.

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Pension -  Can I take lump sum and continue paying in ?

A very common question that requires a bit of explanation, but the simple answer is YES, more importantly we can arrange this for you. Just visit http://www.best-pension-annuity.co.uk/Pension_Lump_Sum_Only.php

Unlike many similar contracts on the market, our contract allows you to take 25% of your pension fund as a TAX FREE lump sum and leave the rest invested until you are older, you can also continue paying regular pension contributions. Those contributions will also attract tax relief at your marginal rate. At a later stage you can even take a further TAX FREE lump sum from the contributions you made after you took the original lump sum.

Once you are aged 55 or over it is perfectly legal to take a lump sum from your pension. If you want to take a lump sum from your pension and continue to pay into the pension the contact me at Best Pension Annuity by calling 020 33 55 4827. You can ask as many questions as you like – we will also provide you with free quotes and information pack all without any obligation.

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I've been working on getting social media 'like' links on the website. Think I am there now, I just need a few people to like us !!! If you have a facebook and / or a Google+ account please visit www.best-pension-annnuity.co.uk and click the like buttons that now appear at the top of the page.
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Many people are getting caught out by websites apparently offering people access to their pension fund before the age of 55. The simple trust is that none of these sites are regulated by the Financial Conduct Authority, or approved by Her Majesty's Revenue and Customs.

This means that you face both the risk of losing the vast majority of your pension fund, but can then be fined a huge amount by HMRC for the privilege. Police in the UK are working to shut many of these schemes down - Don't take the risk, don't do it !!
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