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Pensions


For example, the use of personal pension plans including Self Invested Personal Pensions (SIPPs), and company pension schemes. These provide:

Tax relief on contributions made within allowable limits

Virtually tax-free growth of the investment fund

On retirement a tax-free lump sum of at least 25% of the pension fund plus a taxable income during retirement

Pension plans are most valuable where a higher rate of income tax is received on contributions made now, compared to the tax paid on income received, from all sources of income, during your retirement.

Our financial planning software enables you to look ahead into the future and, based on reasonable assumptions, adapt your overall retirement planning strategy to minimise the likelihood of paying unnecessarily high rates of income and indeed capital gains tax.

 

Individual Savings Accounts (ISAs)


ISAs are an extremely valuable retirement planning investment scheme.

Whilst there is no tax relief on contributions made to ISAs, they grow virtually tax-free (similar to pension arrangements) but importantly they are capable of providing a completely tax-free income or a series of entirely tax-free lump sums to provide a regular income stream during retirement.

 

Open Ended Investment Companies (OEICs)


OEICs can also be used within a carefully constructed retirement investment planning strategy to produce a tax-free 'income'.

Under current legislation (and legislation that has been in place for many years now), it is possible to take capital gains from investments that are both free of income tax and capital gains tax (CGT) for the investor.

By placing a suitable amount of one's available capital in such investment vehicles and by specifically investing mainly for capital growth (rather than for income) it is possible to generate tax-free ‘income' by sensibly using the annual CGT allowances available to us all.

Insurance Bonds


Once pension plans, ISAs and OEICs have all been utilised to best effect insurance bonds can often be incorporated within a retirement planning strategy to provide further useful tax breaks.

Onshore and offshore bonds may be useful where the rate of income tax paid now by an investor is higher than the income tax rate anticipated in retirement.

Releasing Equity From Your Home


In conjunction with financial product and investment planning based solutions, many clients accept that trading down from their current property to a smaller one, or one of less value, is a viable option and such future planning can be built into your overall retirement plan.

Any increase in the value of your home is, under current legislation, free from any tax charge provided the property is deemed to be your 'principal main residence'.

The equity released in this way can be used to settle any outstanding mortgage balance (thereby reducing outgoings and increasing net spendable income) and / or to provide a lump sum from which to generate future additional income.


 
 
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