Armstrong Watson’s Post

Voyage Financial Planning latest article discusses Britian's biggest pension taxpayers and how you could avoid becoming one #retirementplanning #pensions

Britain’s biggest pension taxpayers & how to make sure you avoid becoming one Since 2015, individuals over the age of 55 with defined contribution (DC) pension pots have enjoyed full freedom to decide how to manage their pensions; purchasing an annuity (a guaranteed income for life) is no longer mandatory. More than 221 people fully withdrew a pension pot of £250,000 or more between October 2022 and March 2023, resulting in a tax bill of at least £97,500 each, according to new analysis of FCA figures. Following the reduction of the 45p rate of tax from £150,000 to £125,140 from April 2023, a pot of £250,000 withdrawn in the current tax year (2024/25) would lead to a tax bill of at least £98,700 each – over £1,000 more. In the same period, October 2022 to March 2023, 1,537 people fully encashed a pot of between £100,000 and £249,000, leading to a minimum £27,400 tax bill for each person. Someone fully withdrawing a pot of £174,500, the middle point of that range, would have paid at least £63,500 in 2022/23 and a minimum of £64,700 now. These figures only consider the pension – people with other sources of income at the time of withdrawal would pay even more tax

· An overview of key tax-saving actions before 6 April 2024 (page 2) · Paying more into pensions via unused annual allowances (page 3) · The potential benefits of bringing pension pots together (pages 4 and 11) · Cash isn’t always king: Watch out for the short-term cash trap (page 8) This handy newsletter is released each month by our Lumin Wealth partners, a must read to keep on top of your finances in 2024.

Pensions for children – what you need to know At a glance * Starting a child’s pension is a tax-efficient way to save for their future and move money across generations. * Only a parent or guardian can set up a pension for a child, but then anyone can contribute. * By starting early, even small contributions to a child’s pension have time to grow, with the power of compounding. Saving for retirement might not be something you think about starting while you’re still reading bedtime stories and going to soft play centres. But opening a pension for your children can set them – and their own future family – up for financial wellbeing. #children #pensions #future

Pensions for children – what you need to know Saving for retirement might not be something you think about starting while you’re still reading bedtime stories and going to soft play centres. But opening a pension for your children can set them – and their own future family – up for financial wellbeing. Setting up a pension for a young child means even small contributions have more time to grow. And given that we’re all living longer – planning now for your family’s future can have a real positive impact. Financial advice can help you find the most tax-efficient way to help spread your wealth across generations of your family – and make sure that you’re not giving away more than you can afford. #pensionplanning #wealthmanagement #generationalplanning #financialplanning

Pensions | "On the face of it, removing the cap feels like great news…. that is, until you read the small print." Read more from our blog on the new pension puzzles that removing LTA brings: https://lnkd.in/ejbsbuQS If you want to understand how this may affect you, please get in touch: https://lnkd.in/ex5iNabY #partnerforlife #financialplanning #lta

New issue of Lumin News is out with yours truly as the cover star! My article covers some key tax saving options to consider before the end of the tax year. Plus beyond that there are a number of very pertinent articles talking about the big issues affecting all of us, definitely worth checking out. And its free! No paywall!

Some great insights here from the Financial Planning team at Lumin Wealth:

Many advisers favour automatically reversionary pensions (ARPs) as a popular strategy for SMSF succession planning. Indeed, in recent times, ARPs have gained prominence and have often been seen as the default choice by many. For instance, some focus on the 12-month deferral of the transfer balance account (TBA) credit for the reversionary beneficiary, with the credit value being locked in at the time of death, as a distinct advantage. However, it is important to properly weigh up all the key factors when formulating an SMSF succession plan that includes a death benefit pension. Naturally, this should include consideration of potential advantages and disadvantages especially as we head towards 30 June 2025, with the new div 296 tax on member balances that exceed $3 million proposed to commence from 1 July 2025. In this article, all legislative references are to the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 (the Bill) unless otherwise stated. https://lnkd.in/gFDhqwj6 #ATO #SMSFcompliance #SMSFdeeds #SMSFstrategy #Successionplanning #Taxation

Pensions are one of the most tax-efficient ways that you can save for the future. But the number of people getting caught out by pension tax charges is rising sharply, so it's important to check whether you'll be affected. 👀 For expert advice on saving for your future, get in touch with us or click the link below to find out more. 👇