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A lesson in pensions
Key points
- If a pension scheme is registered with HMRC the fund does not pay income tax or capital gains tax and grows tax-free.
- At age 55 a lump sum of up to 25% can be taken with the rest of the fund generating an annual taxable income.
- Income tax relief is given differently on contributions into an employee scheme and a personal pension scheme.
- Higher rate taxpayers must consider the annual allowance rules when paying into their pension pots.
- For those of retirement age who want to realise their investments the two main options are a pension annuity or a ‘flexi access drawdown’ fund.
Having made it to the end of another week of teaching from the kitchen table I was looking forward to putting away my tax books and starting the weekend with our family ‘Zoom’ call that has lately become a Friday night tradition. Little did I...
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