FAQ (Frequently Asked Questions)
Find answers to frequently asked questions…
You could end up paying a tax charge on the excess amount. This can be paid as an excess as an income or as a lump sum.
Tax is paid on pension savings above the lifetime allowance and it depends on how the money is going to be paid out.
For example if you get a lump sum this could attract 55% tax. Or, if you take cash withdrawals as pension payments this will attract 25%
Some workplace schemes are defined contribution. The allowance for a lifetime allowance calculation is usually 20 times the pension you get in the 1st year PLUS a lump sum. Some people are likely to get caught out by this. Therefore, its important to get advice on how to mitigate or protect yourself against unwanted tax bills.
Most personal, stakeholder and workplace schemes are defined contribution pensions. Money in your pension savings counts towards your Lifetime Allowance.
You will pay tax if your pension savings are worth more then the lifetime allowance threshold which is currently (2021) £1,073,100
You can ask your pension provider (or your pension adviser) to calculate how much pension allowance you have used. If you dont have a pension adviser you can utilise Pensions Advice UK and we can put you in touch with our specialist Pension Adviser for Lifetime Allowance issues.
IN 2015 new rules came into force governing the way you can access your pension funds and what happens to those funds when you die. Most pension schemes provide some form of death benefit prior to your retirement and your pension beneficiary should contact the government pension advice service
Dependent on the type of pension, will depend on what happens to your funds, therefore it is really important to get qualified advice from an adviser who can then give you a clear understanding of what will happen, and importantly how to mitigate any implications that may be financial damaging in the event of your death .
- Get professional advice.
- Make sure you have a Will set up by a professional.
You can’t normally access funds in a pension until you are 55 and this is moving to 57 in 2028! You can then get 25% tax free and the rest you access is then taxable. Pension and tax rules change, so it is really important to take financial advice from a qualified professional.
One of the most popular types of Self Investment Pension – Is a SIPP – you can manage your own investments in your pension pot yourself. You can open a SIPP as well as any other person or work pension. If you use a SIPP you can include investments that may not be available through your existing pensions.
You can check on the FCA web site if an adviser is independent or not. The FCA web site is always a good place to go to check if the advice you are getting is independent.
There is a simple threshold of £30k – if your pension is less than this you have the option of not taking advice. However, if your pension is worth over £30k the government say that you need to take professional advice. This is to protect you and provide you with assurances that everything is done properly. Even if your pension is less than £30k in value – We would still suggest speaking to an adviser, they can help you to prepare for retirement or maximise the value of your pension fund and prepare for unforeseen events in your like.
This can be done using a qualified pension adviser. Every time you take money from your pension the fund gets smaller, and you could be liable to tax. So by taking qualified advice you can understand the best way to do this AND importantly what impact your drawdown will have!
The simple answer is yes. However, it is important to understand what you might be loosing/gaining and how best to go about this.
If you have multiple pensions that you currently contribute to, or that have lapsed from previous employment, or pensions you have set up and not maintained, or you have old SERPS that you opted out of years ago!
Our specialist qualified pension consolidation advisors will track down and get you accurate valuations of ALL your funds.
*It is crucial to get qualified advice (ALL Pensions Advice UK Advisors ARE qualified specialists) before embarking on combining your pension funds…For example, many people are unaware that they could loose some benefits that existing pension plans provide by combining the pension incorrectly.
By combining your pension funds and getting professional managed funds they are more likely to improve your pension income, after all thats why you speak to a Pension adviser. You can improve your overall retirement income potential.
Also, use our Pension Tracing Service and we will help you find the pensions and then you can utilise them for your retirement!
You can make further contributions, but you need to understand the tax implications and what the best way of making further contribution is.
We can carry out a thorough pension tracing investigation, we can get an accurate value of how much ALL your pensions are worth. Once we have the right information, our specialist qualified pension advisers will help you to utilise the funds in the way that works best for you.
we can go back many years and find pensions that you had lost touch with. Pension savings that you may have thought were small due to the amount you contributed, but in lots of cases these funds may have grown significantly and be worth much more than you think!
IF you have already taken advice and transferred a defined benefit pension, you may be entitled to compensation as you will have lost some of the “hidden” benefits you should have received. We would therefore encourage you to speak to our specialist legal team who can advise you. If you have lost out, either knowingly or un-knowingly, you may be entitled to significant compensation and restorative redress.
Understanding ALL your options is vital in making the right decision. It is important to get qualified advice and find out your options and the choices you have.
Companies advising you on your pension must be regulated by the Financial Conduct Authority (FCA) and individuals within the firm hold the relevant defined benefit pension qualifications and expertise.
Defined benefit pension schemes were regarded as ‘Gold Plated’. They provided generous guaranteed benefits and a secure income for life. As such, defined benefit pensions were regarded as ‘the best you could possibly get’. But in some cases this has changed or is not as clear.