MSE News: Budget 2014: Radical reforms to give greater access to pensions savings

dunstonh

Didn't pension mortgages die because the 25% allowance wasn't covering the mortgage - this removal of that limit surely changes that, as you'd only pay 20% tax instead of 55% if the tax free allowance didn't cover the mortgage.

Pension mortgages were never big but the main reason they went on to fail is the same as endowments. Investment returns did not reach the target figures required to be able to clear the mortgage.

actd

I'll get some advice, but I think my plan will be to divert the overpayments only into a pension, probably with some extra from my income, and ringfence this money into the current higher risk/higher return funds that L&G have been returning, while letting the rest go onto the normal 'glidepath' to retirement. That's probably the least risky overall, and potentially gives me an extra tidy sum at retirement.

Thanks for all the advice and comments - much appreciated in getting my thinking clear.

atush

Salary Sacrifice should be taken if available.

Not only do you save income tax, you save on paying Nics on the money as well. And your employer saves Nics too (and sometimes they will give some/all of this savings to you).

PhiltheBear

My situation is a bit confused.

Firstly, I'm over 65 and getting state pension. Secondly, I have 2 private pensions which, between them, pay me around £450 per month.I took the 25% tax free part of those when I started taking the pensions.

I also have an unclaimed pension pot of just over £2,000. If I understand the budget correctly, I think I can cash the whole amount of that in now (because I understand the limit to have been raised to £10,000 from March 27th). I understand that such a withdrawal would be subject to tax - but is my reading of the situation correct and is it, in any way, affected by the fact that already have 2 pensions paying me?

Anybody know?

ianncc

I have a few years to go yet, but was really excited RE the new goverment rules, until i read the small print,
apparantly if i have over 30k in my sipp pot i cannot withdraw the whole amount,
is that true ?,

as my pension manager said if id have had under 30k i could have withdrawn the lot,

really miffed as i will only have around 55k anyway.

Any help really appreciated,
as im really clueless over all the pension regs.

atush

The effect of those pension (and the SP) is that you will be taxed ( I assume BRT) on 1500 of that 2K pot. 500 of it will be tax free.

That is if all your income is over 10.5K, if less than that, you will get some of the 1500 tax free as well.

atush

ianncc wrote: »

I have a few years to go yet, but was really excited RE the new goverment rules, until i read the small print,
apparantly if i have over 30k in my sipp pot i cannot withdraw the whole amount,
is that true ?,

as my pension manager said if id have had under 30k i could have withdrawn the lot,

really miffed as i will only have around 55k anyway.

Any help really appreciated,
as im really clueless over all the pension regs.

If you are 55, from next year you would be able to draw it all, but that may very well not be a good idea for you?

eastcorkram

atush wrote: »

Salary Sacrifice should be taken if available.

Not only do you save income tax, you save on paying Nics on the money as well. And your employer saves Nics too (and sometimes they will give some/all of this savings to you).

I like the sound of this. Is it something I can do by talking to the pension company or should I speak to my employer?

bigadaj

eastcorkram wrote: »

I like the sound of this. Is it something I can do by talking to the pension company or should I speak to my employer?

Speak to your employer. It would also be beneficial for them as they will save employers NI, so see if you can negotiate so,e or all of that to go into your pension as well. My last job split the employers half and half between employee and the company and am awaiting details fro, my new employer. My partner gets all of the employers NI but she's a better negotiator than I am.

atush

eastcorkram wrote: »

I like the sound of this. Is it something I can do by talking to the pension company or should I speak to my employer?

Salary sacrifice is when they pay in for you, so yes you'd speak to your employers HR or payroll dept.