Who will inherit your pension fund?

With major pension changes on the horizon, that will increase their tax effectiveness when they are implemented in April, Enables’ IFAs in Bishops Stortford can help you get your pension arrangements in order. 

Some of the things to consider before the changes come in to effect include:

Have you made sure you have given your pension fund manager the name of the person who will inherit your fund? Now, in most cases, your unused pension funds can be inherited free of tax.
The chancellor has tipped the tax scales in favour of pensions by doing away with the 55% death tax charge. Until the changes where brought in (unless you died before age 75 without touching your pension fund, or you passed on your fund as a pension to your partner), 55% of the pension assets in your personal or money purchase pensions went to the taxman.

But you have to have told your pension company whom to pass your fund to. Otherwise, the remaining money will go into your estate and will be subject to inheritance tax. So make sure you contact your pension company to nominate your beneficiary.

You might also want to check if you can contribute more into a pension particularly if you are a higher-rate taxpayer, pensions are probably the most tax-efficient form of savings if you are in this tax bracket and especially if you are near or already over age 55. If you have not yet reached your £1.25 million lifetime limit, and not contributed the full £40,000 annual allowance, you can put more into your pensions by using up any unused allowance from the past couple of years. As long as your earnings are high enough, you can take advantage of the tax relief and the very favourable inheritance tax benefits. Perhaps you should consider moving other savings into pensions to build up a bigger fund for the future. Enables IFA’s are happy to talk through your options.

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