Many like managing director of Mortgages at CHL, Bob Young says the impact on the property market has been “completely overblown”. “If you are 60 years old with a relatively small pot, (the average UK pension pot is £30 000) then are you really going to gamble it by buying a property?” he says.
Clearly the tax implications make withdrawing large amounts unattractive to most people. For example, if we took a 55-year-old earning £50,000 a year with a £200,000 pension pot they would be able to access £50,000 tax-free. Then from next April, they could access the rest but would need to pay 40 per cent income tax. If they withdrew £150,000 in one blow, their annual income would be £200,000 and liable for the top rate of tax. It would cost £65,000 in income tax on their pension fund and they would only be left with £85,000.
“When you step back and work through the tax implications, then why would you do it?” says Young. “If you buy a property at £150,000 then you need at least a £30,000 deposit and you are beginning to pay 25 per cent tax on it. It is simply not logical for most people.” The tax implications for most simply do not add up if you want to discuss options for your pension our experienced Independent Financial Advisors at Enable of Bishop’s Stortford are here to help.
Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE
No comments:
Post a Comment