The 'A' Day rules that came in to force in 2006 have certainly made pensions much simpler for most investors, with an individual Lifetime Allowance (£1.8 million - 2011/12). Contractors can personally place up to 100% of their salary into a pension. In addition the rules regarding funding a pension scheme direct from your limited company allow a massive investment of up to £50k pa irrespective of salary.
• Contractors have greater flexibility in the size and timing of their contributions.
• Up to 25% Tax Free Cash is available on many schemes at age 55, without you having to formally retire.
• New and more flexible options at retirement including the freedom to defer purchasing an annuity- indefinitely if required
• No need to 'secure' benefits with a rigid annuity by age 75 as in previous years
• Earliest retirement age has risen to age 55
• Full concurrency i.e. being able to pay into any array of plans you wish
• Contractors now have the ability to pass pension funds onto future generations using 'family' pensions.
It seems fair to state that pension investment will allow far more freedom in future, with greater possibilities for tax savings, enabling contractors to build a better nest egg towards a prosperous retirement.
To discuss your future pension planning along with any existing schemes that you have please fill in the contact form here and we will be in touch shortly.