Retirement Planning

It is becoming increasingly clear that most of us cannot depend on the state to fund our lifestyle in retirement. It is up to us to make our own pension arrangements and to ensure that we make any necessary changes to our plans whenever the Government moves the goalposts.

Changes in Pension Legislation April 2011

There are a number of changes to pension legislation on the horizon, as detailed in the 2010 Budget and Spending Review.  Both Public and Private Sector pensions will be affected – and those wishing to make substantial pension contributions may see their future contribution allowances drastically reduced from April 2011.

From that date, the amount you can place into your pension plan without suffering a tax charge will be restricted to £50,000 per annum.  For those earning more than £130,000 a year this is actually an improvement from the April 2010/11 position but for those earning below this figure, this is a significant reduction from the current position of being able to pay up to £255,000 a year into registered pension arrangements.  Significantly, this figure of £50,000 includes accrual within final salary pension schemes which means for those people who are members of occupational schemes, their ability to also fund private arrangements will be severely restricted in the future.

For those of you who were looking to make substantial contributions to your pensions in the future, this is bad news and it will be essential to consider alternative options for funding retirement from next tax year onwards.   More pressingly, this proposed legislation means that between now and April 2011 there is a one-off opportunity to fund a pension at a higher level than will be possible in the future.

Browse our Retirement section to find out more about pension savings and retirement income options.

Contact us to discuss the latest changes to Pension legislation.