“Constant tinkering” and a confusing system provide little incentive for pension saving, leaving millions at risk of poverty in old age, new research suggests.
This is despite the government giving out ‘free’ money in the form of tax relief. These tax reliefs cost the government £40bn a year, yet just one in three savers say they are the reason they save into a pension, according to a recent article in the Independent, while more than half have no idea how pension tax relief works or how much they get.
You can read the article here: Jargon and confusion mean millions miss out on ‘free’ old-age cash | The Independent
Many people see the pension system as complex. Savers are expected to know their annual allowance and tax rate, national insurance reliefs in salary sacrifice, the lifetime allowance, and whether tax reliefs are given at source or through a net-pay agreement. At Hamnett Wealth Management, we always speak in plain English and explain everything comprehensively. We encourage clients to ask as many questions as they need to until they are comfortable and able to make an informed decision.
If you would like pension advice, we can look at whether your current pension arrangements are likely to help you achieve your retirement goals. If not, we will recommend actions to take and the likely effect of them in order to secure your financial future.
We ensure that you fully understand all of your numerous retirement options and that you don’t have to take the first offer from your existing pension provider. There is nearly always better value to be had from the open market when considering annuities and the new flexible pension option should also be fully considered.
Our impartial advice takes into account all of this as well as the latest retirement and pension legislation, including the new limits on lifetime allowances. If necessary, we will also recommend any steps you can take to limit your tax liabilities.