TAX: Pensions and Savings following the Autumn Statement
The Autumn Statement bought news regarding pensions and ISA’s.
Read our full Autumn Statement summary here.
Change to annuity pensions
The recent Taxations of Pensions Bill announced the majority of the changes regarding pensions, however there was a new announcement regarding pension annuities, which takes effect from the new tax year, 6 April 2015. Those with a joint life of guaranteed annuity pension will be able to receive pension payments tax-free should one of the pension holders die under the age of 75.
In addition the annuities of such policies can now be passed to any beneficiary.
Pension tax relief to aged 75
There had been talk about changing the age limit at which tax relief can be claimed on pension contributions. However, the Chancellor announced the decision for this to continue at aged 75.
State pensions – a small increase
Albeit a small rise, but the state pension will increase by 2.5% resulting in a minimum state pension of £151.25 per week when receiving the full single tier state pension.
Most doctors and dentists are in the fortunate positon to have excess monthly income to secure their financial future in a tax efficient way through a private pension.
If you haven’t considered pension planning as part of a retirement strategy then contact Lansdell & Rose who can help provide tax advice and connect you to specialist financial advisors.
Individual Savings’ Accounts (ISA’s)
For savers, the ISA allowance is due to increase again from April 2015 to £15,240. This is positive and is aimed to further encourage savings.
Additionally, when a spouse or civil partner is “widowed” following the death of their loved one, they will now inherit the tax advantages of the deceased ISA saver. They will also benefit from an additional tax-free allowance each year that is equal to the ISA savings balance.
This change is with immediate effect; the decision following the fact that thousands of savers were losing out on tax breaks despite the fact that often money was saved jointly.
To discuss ISA’s with a professional, specialist financial advisor, we can help connect you.
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