Financial experts put pension advice top of the agenda
High earners are being encouraged to review their pension plans by Spofforths Financial Planning, part of the Sussex based firm of chartered accountants. The Financial Planning team is offering advice on pension arrangements, fearing that many people aren’t aware of how new Government rules could have an impact on their existing plan. The firm is handling a number of pension related enquiries following the Budget on 22 April 2009.
The Government has introduced a special tax charge on any additional contributions made in a single tax year of £20,000 or more. This allowance applies to those with total income in excess of £150,000 in tax years ending 5 April 2008, 5 April 2009 or 5 April 2010. This charge will be for the difference between the higher rate of tax and the basic rate of tax (currently 20%) and applies to company and personal contributions.
Philip Wise, Managing Director of Spofforths Financial Planning, commented: “I recommend all high earners gain advice on how these rules may affect them. Pension reviews at this time are vital as people should establish whether they are able to boost their funds through effective tax planning. Those whose income is less than £150,000 should carry on paying into pensions as they are a really good way of saving tax.
“Those earning more than £150,000 should still put in additional lump sums of up to £20,000 as they will get tax relief of 40% and even though tax relief for high earners has been restricted now, tax relief of 20% shouldn’t be ignored.
It will be even more tax efficient for those earning between £100,000 and £150,000 to put money into pensions next year as they will get 50% tax relief rather than 20%. Our field of expertise is helping clients to adapt their pensions to ensure they meet future requirements.”
Date:5 June 2009