Ipswich Financial Adviser

Posts Tagged ‘tax free cash’

As a reminder to the post I made in November, the rules for taxing tax free cash from your pension change on the 6th April 2010. The pension companies are very busy with the additional requests and it will soon be too late to get everything organised by the 5th April 2010, so read on and make sure you don’t get caught out.

At present, if you reach your 50th birthday then you can potentially take up to 25% of your personal pension fund as a tax free lump sum. Unfortunately, from the 6th April 2010, the age to be able to do this changes to 55. There is NO transitional period, the change just comes in.

If you have always considered taking your tax free cash and you are not 55 on the 6th April 2010 then you will have to wait until you are. This could potentailly mean a wait of up to 5 years; as if you reach your 50th birthday just before the 6th April 2010 and don’t action a request for a tax free cash withdrawal then you will have to wait 5 years until your reach 55. This could affect your retirement plans.

If you feel this issue will affect you then you need to start planning now. Contact Thompson Financial Consulting Ltd and we will be happy to help.

The value of investments and the income from them can go down as well as up and an investor may not get back the amount invested. Past performance is not a guide to future performance.

Unlocking your pension will almost certainly mean that you will have less income in retirement AND because of the reduced level of income pension unlocking is usually only suitable for a very limited number of people and circumstances. All other options should be investigated fully before you consider unlocking your pension.

An easy way to preserve your money is to ensure you get your self assessment tax return done on time.

If you miss the deadline of the end of January 2010 to submit your return to the HRMC then you will incur a penalty.

Don’t let the HRMC have more of your money, so bite the bullet and get your tax return done before the cut off date.

The second thing to do is to check that your tax code is correct. Don’t assume that this has been correctly applied by an employer. If it is wrong you could be missing out on  tax free income. Check with your employer or HRMC to ensure you get what you are entitled to.

If you have any tax issues then please contact Thompson Financial Consulting and we can put you in touch with accountants that come highly recommended.

At present, if you reach your 50th birthday then you can potentially take up to 25% of your personal pension fund as a tax free lump sum. Unfortunately, from the 6th April 2010, the age to be able to do this changes to 55. There is NO transitional period, the change just comes in.

If you have always considered taking your tax free cash and you are not 55 on the 6th April 2010 then you will have to wait until you are. This could potentailly mean a wait of up to 5 years; as if you reach your 50th birthday just before the 6th April 2010 and don’t action a request for a tax free cash withdrawal then you will have to wait 5 years until your reach 55. This could affect your retirement plans.

If you feel this issue will affect you then you need to start planning now. Contact Thompson Financial Consulting Ltd and we will be happy to help.

The value of investments and the income from them can go down as well as up and an investor may not get back the amount invested. Past performance is not a guide to future performance.