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    • tm9
    • By tm9 9th Oct 16, 3:39 PM
    • 37Posts
    • 7Thanks
    Should he open a new pension - really appreciate advice
    • #1
    • 9th Oct 16, 3:39 PM
    Should he open a new pension - really appreciate advice 9th Oct 16 at 3:39 PM
    Hi, would really appreciate your advice on this. I am posting this on behalf of my brother who will be meeting with an IFA at the end of this month, but we would appreciate your views. Aged 51, owns own house worth around £380k (has paid off mortgage), 180K cash in isa/bank accounts, two private pension policies with Royal London: 1 Personal Pension Plan - fund value: £18,500 - transfer value: £44,000, 2: Personal Pension Plan (with former protected rights) - function value: £3481 - transfer value: £9439.

    He stopped paying in to the pension fund years ago and no more contributions can be added to these. We are wondering whether he should open a new pension fund and pay in some of the cash to take advantage of the 25% tax relief, and then he can withdraw the cash again when he is 55,65, etc. (25% lump sum and then the rest slowly to avoid any tax?). The other option being considered is purchasing a buy to let property. Does the pension route sound sensible? Thanks
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    • kidmugsy
    • By kidmugsy 9th Oct 16, 3:53 PM
    • 8,481 Posts
    • 5,456 Thanks
    • #2
    • 9th Oct 16, 3:53 PM
    • #2
    • 9th Oct 16, 3:53 PM
    Does the pension route sound sensible?
    Originally posted by tm9
    Yes. it will be even more attractive if: (i) His contribution would attract an employer contribution, and (ii) Especially if his contribution can be by salary sacrifice, or (iii) He's a higher rate tax payer.

    But even if none apply, putting money in with tax relief and later drawing it out without paying tax is a gamble where the odds are heavily in his favour.
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