Review your pension annually
In order to make the most of tax-free savings it is vital to review your pension at least once a year. Now is an excellent time to do so especially if you’re a higher rate taxpayer who is entitled to tax relief claimed through an annual tax return.
A review of your existing pension provision will highlight any growth achievements and any tax free savings resulting. If your pension fund achieves a realistic 10% growth then you can expect 25% of this growth amount to be free of tax.
Consolidating multiple products
Many people may have more than one pension and it may be possible to transfer these into one that is achieving higher more consistent performance. If these are old pensions then it is likely that the holder will be paying higher charges, so these should be investigated and possibly switched.
With the impact of possible furlough on your pension, it is vital to examine your true retirement scenario. Whatever your situation the message is clear – review, review, review – at least every year so now is as good a time as any to do so.
Select a pension that best suits your needs
As your age increases, you are less likely to wish to experience the peaks and troughs in performance. Therefore, it makes sense to choose a pension that incorporates less risky funds.
Of equal importance is the need to ensure that the pension is operating in the most tax efficient manner and is able to withstand the impact not only of Covid-19 but also a rocky Brexit.
Seek professional advice
Strong, unbiased financial advice will highlight the most appropriate funds for pension investment and will also secure the most tax efficient options.
For more information contact Becky Hammonds on: 01782 331158 or 07969 269677 or email becky@willowfs.co.uk
