Huge increase in tax

penners324

If he's earning that much it's plain daft not pay as much as possible into a pension. The advantages massively outweigh the mortgage overpayments.

Albermarle

Pennywise said:

Albermarle said:

Sorry if I have misunderstood, but it sounds like the planned visit to your accountant is coming at a good time. Although they are usually reluctant to offer specific advice about pensions etc they can hopefully point you in the right direction.

It's not really "reluctance", pensions advice is regulated financial advice and it's the job of an independent financial advisor to give such advice.  Most accountants won't be regulated by the FCA as independent financial advisors.  Two completely different professions.  I'd expect an accountant's "advice" in relation to pensions to be little more than telling you the tax effects of investing into a pension - they're simply not authorised to advise whether it's a good idea or not, nor which type of pension scheme/fund to invest in.  Other than some tax calculations and illustrations of paying different amounts into a pension scheme, that's about all you'll get from an accountant because it's all they're allowed to say.  They certainly won't be able to advise whether you'd be best paying off your mortgage or paying into a pension - again, they "may" be able to crunch the numbers and give you an illustration, but that's it.

I do not disagree, maybe 'reluctance' was not the right choice of word.
What we do see though regularly on the pensions board, is that people are not aware of these distinctions, and assume their accountant will also give them financial advice ' because they know about money' and seem a bit surprised that the accountant either will not , or in fact can not as they do not know much about it.
On the other side, we often see posters who have been given bad advice by their accountant on personal finance matters.
I suppose there is inevitably a grey area, especially concerning taxation, where often an individual or small business director can best mitigate some tax by contributing more to a pension.