Started my pension

brianrhill

jem16 wrote: »

Ah that's what it is - the iphone 4 "death grip"

Seriously, though, what do you view the tax relief as?

haha :beer:
My personal view of tax relief is where you pay a premium for a product, effectively from your gross (pre-tax) pay. Examples would include not just pensions, but also the old Pension Term Assurance. I'm open to other, more concise descriptions! In the case of pensions, they are essentially tax deferred savings vehicles.

tincans

brianrhill wrote: »

haha :beer:
My personal view of tax relief is where you pay a premium for a product, effectively from your gross (pre-tax) pay. Examples would include not just pensions, but also the old Pension Term Assurance. I'm open to other, more concise descriptions! In the case of pensions, they are essentially tax deferred savings vehicles.

They are - but for many people who fall into the higher rate tax bracket, it means that they will get tax relief at 40%, but only pay 20% tax when the take out an annuity. Obviously the tax free lump sum is also a reduction in tax.

You would need a fair old pension pot these days to be paying 40% tax on an annuity, assuming you took 25% as a lump sum.

brianrhill

agreed! I think most of the people that would fall into that category are ex-bankers!

cyclonebri1

Sorry guys but do feel the need to chip in here.

Pensions are just that, plans to protect your/our future.
BUT;

They are not life contracts. Things go wrong and things change over the 40 years you will "own" one.

Take for example a divorce? not a possibility? think again.

Severe ill health or disablement in your 50's? again a distinct possibility.

I can't quote stats, but I bet for every 2 that go to plan, 1 will go tits up.

The message?, keep the options open.

Cheers and good night.