Pension planning made personal

Pension tax relief is a top up from the government which can give you a valuable incentive to save for your future.

This is the good bit. Every time you pay into your pension, the government gives you extra money by either topping up the contribution, or paying less tax at the time, depending on the type of pension you are paying into. For example, if you pay £100 per month into a personal pension direct to the pension provider, then this net payment is ‘grossed up’ to £125 with the addition of the tax relief.

It’s only available to UK residents under age 75, and for personal contributions it’s limited to 100% of your UK earnings, or even £3,600 if you are a low or even non-earner. There are situations where these limits can be extended.

This is a great place to be, and along with having the benefit of an employer contribution, you will also be making contributions as part of your regular pay or salary, and depending on how this is set up, you will either receive the top up into your pension explained earlier, or you’ll have the contribution deducted from your pay before you even pay tax, making the tax saving up front.

Absolutely! Sadly you won’t have the benefit of an employer contribution, but with careful planning you could make some great decisions around pension planning to make the most of the tax relief available.