A drawdown arrangement that allows a client the flexibility to lock in a higher capped drawdown income limit is invaluable. We examine the issues that can affect the maximum income under capped drawdown and the options in a drawdown arrangement that are required to take advantage of them.
Adrian Walker explains how the reduction in the Lifetime Allowance will generate a whole segment of clients needing your advice.
The following guide outlines important information that is relevant to Skandia pension arrangements for individuals who are affected by the reduction in the annual allowance to £50,000 a year.
Adrian Walker takes a nostalgic look at the retirement market place when advising on clients’ retirement pots.
This article explains the need to protect valuable pre A-Day tax-free cash entitlements held in occupational pension schemes.
The Equality Act is designed to consolidate numerous separate pieces of legislation into one set of rules, in order to achieve a more consistent approach to all aspects of anti-discrimination law. It has a bearing on the structures of pension arrangements. This article gives a more detailed analysis of it's effect on pensions.
QROPS now form a key element of retirement planning for individuals with UK pension funds who are planning to emigrate and want to look at the options for retaining their existing UK-registered pension scheme funds under UK legislation. This article looks to answer some of the key questions surrounding what a QROPS is and the rules applying to the way such schemes operate.
When considering the possible transfer of the cash equivalent of a client’s defined pension benefit it is a regulatory requirement to prepare a detailed transfer analysis report (except where a client is crystallising benefits within 12 months of the transfer). To help you in this process we have provided a sample of the report output below to which we have added explanatory notes.
This article covers recent proposed changes to the QROPS regime and the impact they will have from 6 April 2012.
Adrian Walker looks at another client pension review opportunity afforded by recent legislation changes.
Adrian Walker explains the long-term effects of the Chancellor’s Autumn Statement on your clients’ pension planning.
Adrian Walker looks at the implications for your clients from the changes to pension allowances confirmed in this year’s Budget.
The following sets out in detail the rules applying to the GMP that apply to members with pre 6 April 1997 service in a defined benefit contracted-out scheme. The information will be particularly useful when considering the transfer options available in respect of an accrued benefit under a Contracted-Out Salary Related (COSR) pension scheme.
Phil Carroll runs through a worked example detailing how you can efficiently supplement a client’s retirement ‘income’ through other tax wrappers.
This article explores the practical implications of the reduction in the lifetime allowance on scheme members.
The economic crisis has hit the retirement income planning of clients with money purchase pension savings.
There are no limits on the amount that can be contributed to a registered pension scheme. However, there are limits on the tax relief that can be given. Tax relief on member contributions is limited to 100% of an individual’s earnings or £3,600 if higher, and relief for employer contributions is subject to them being made wholly and exclusively for the purpose of the business.
There is no limit on the amount that can be saved into pension arrangements each year, but there is a limit on the amount that can get tax relief. The annual allowance is the maximum amount of tax relieved pension savings that can be made each year to all pension arrangements for an individual.
In simple terms a pension input period (PIP) is a period over which pension accrual is measured to determine whether an individual has exceeded the annual allowance in a particular tax year. It works on the principle of how much was saved from the start of the pension input period to the end of the pension input period.
The amount of pension saving made during a PIP is known as the pension input amount. The type of pension arrangement determines how the pension input amount is calculated. The types of arrangement are money purchase (for example personal pensions, executive pension schemes or additional voluntary contributions), defined benefit, cash balance and hybrid.
There are different annual allowance rules for Pension Input Periods that commenced before 14 October 2010 but end in the 2011/12 tax year.
Please note: Carry forward relates to unused annual allowance not unused tax relief. If the individual relies on carry forward to make a large personal contribution they must have the earnings in the current tax year to
If total pension inputs exceed an individual’s available annual allowance, they will be subject to an annual allowance tax charge. The charge will be levied at an ‘appropriate rate’. The appropriate rate is determined by adding the amount subject to the charge to the member’s ‘net income’.
From the beginning of the 2010/11 tax year individuals with ‘net adjusted income’ in excess of £100,000 had their personal allowance reduced. This reduction will be at a rate of £1 for every £2 of income over £100,000. Based on the personal allowance, this means that any person with income over £116,210 will lose their full personal allowance applying for the 2012/13 tax year.
Employer contributions to registered pension schemes play an important part in funding retirement provision for directors and key employees. On an ongoing basis they will become more important when auto-enrolment is introduced into the private pension arena. This article covers the impact that employer contributions will have in relation to the pension changes introduced from 6 April 2011.
Salary sacrifice allows an employee to give up an amount of their salary and replace it with an employer’s pension contribution creating a larger pension contribution for the employee than they would have paid themselves for the same or lower net cost. The process can also be applied to bonus sacrifice with the same effects.
Higher rate tax relief is given by increasing the basic rate and higher rate band by the amount of gross contribution paid into a personal pension. The affect of this is that the investor will get higher rate relief by paying basic rate tax on income that they would have otherwise paid higher rate tax on.
Higher rate relief on personal pension contributions is generally given through Self Assessment. This article explains some of the key dates for Self Assessment and the effect of pension contributions on payments on account and balancing payments.
Ordinarily it is clear whether a contribution is being made by an individual, third party or employer. However, sometimes difficulty arises in identifying whether a contribution is being made by an individual or a business, especially where pension contributions are being made out of business bank accounts.
Adrian Walker highlights further changes to pension rules brought in this April that may have slipped under the radar.
Adrian Walker looks at the death benefit implications of the new income withdrawal regime.
This at a glance article describes the requirements that need to be met to access flexible drawdown.
Adrian Walker explains why people who are in drawdown but not taking any income could be losing out, and should seek advice.
Adrian Walker provides details of the effects of the Gender Equality Directive on drawdown clients.
Her Majesty’s Revenue and Customs (HMRC) has updated their drawdown guidance for pension providers requiring that, from 21 December 2012, female drawdown limits be based on those that apply to males. Adrian Walker discusses the impact of this change.
Adrian walker highlights the potential opportunities for advice from the forthcoming pension income withdrawal changes on 26 March 2013.
This article is designed to outline the general principles of how VAT is related to the supply of goods and services in Financial Services.
HM Revenue & Customs has published guidance explaining the affect of Adviser Charging facilitated by deduction from a client’s pension.
Escalation and revaluation
This article explains the revaluation and escalation requirements that apply to Occupational pension scheme benefits.
Inheritance Tax and Pensions
There are a multitude of different types of registered pension scheme and a great degree of flexibility that can be exercised by the scheme member over the timing and form of benefits that can be taken. Consequently, this can make the interaction with inheritance tax a little complicated.
This article examines the key workplace pension scheme requirements.